UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q


(Mark
One)





x
            Quarterly
      Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934





For the
quarterly period ended: September 30, 2007





or





o
            Transition
      report pursuant to Section 13 or 15(d) of the Securities Exchange Act of
      1934





For the
transition period from ______________ to _______________





Commission
file number: 001-15035





ABLE
ENERGY, INC.


(An exact
name of registrant as specified in its charter)





Delaware
            22-3520840(State
      or other jurisdiction of
            (I.R.S.
      employerincorporation
      or organization)
            identification
      No.)







198
      Green Pond Road
              Rockaway,
      NJ
            07866(Address
      of principal executive offices)
            (Zip
      code)





Registrant's
telephone number, including area code: (973) 625-1012





Not
Applicable


(Former
name, former address and former fiscal year, if changed since last
report)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that registrant was required to
file such reports), and (2) has been subject to such filing requirements for the
past 90 days.


o Yes   x  No





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting
company:  See the definitions of a “large accelerated filer”,
“accelerated filer” and “smaller reporting company “ in Rule 12b-2 of the
Exchange Act.




Large accelerated
      filero
            Accelerated
      filero
            Non-accelerated
      filerx
            Smaller reporting
      company  o




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


o Yes
   x No





Indicate
the number of shares outstanding of each of the issuer’s classes of common
stock, as of the latest practicable date:  14,965,389 as of September
30, 2008










ABLE
ENERGY, INC. AND SUBSIDIARIES


FORM
10-Q





For the
Quarter Ended September 30, 2007





INDEX





PagePart
      I.
            Financial
      InformationItem
      1.
            Financial
      StatementsCondensed
      Consolidated Balance Sheets as of September 30, 2007 (Unaudited) and June
      30, 2007
            3Condensed
      Consolidated Statements of Operations for the Three Months Ended September
      30, 2007 (Unaudited) and 2006 (Unaudited)
            4Condensed
      Consolidated Statements of Cash Flows for the Three Months Ended September
      30, 2007 (Unaudited) and 2006 (Unaudited)
            5Notes
      to Condensed Consolidated Financial Statements (Unaudited)
            6Item
      2.
            Management's
      Discussion and Analysis of Financial Condition and Results of
      Operations
            26Item
      3.
            Quantitative
      and Qualitative Disclosures About Market Risk
            31Item
      4.
            Controls
      and Procedures
            32Part
      II.
            Other
      InformationItem
      1.
            Legal
      Proceedings
            33Item
      1.A
            Risk
      Factors
            33Item
      2.
            Unregistered
      Sales of Equity Securities and Use of Proceeds
            33Item
      3.
            Default
      on Senior Securities
            33Item
      4.
            Submission
      of Matters to a Vote of Security Holders
            33Item
      5.
            Other
      Information
            34Item
      6.
            Exhibits
            35Signatures
            
            39Certifications




2




PART
I. FINANCIAL INFORMATION


Item
1. Condensed Consolidated Financial Statements





ABLE
      ENERGY, INC. AND SUBSIDIARIESCONDENSED CONSOLIDATED
      BALANCE SHEETSSeptember
      30,
            
            
            June
      30,2007
            
            
            2007(Unaudited)ASSETSCurrent
      Assets:Cash
      and cash equivalents
            
            $
            3,489,395
            
            
            $
            3,034,183Accounts
      receivable, net of  allowance for doubtful accounts
      of$738,706
      and $744,253, at September 30, 2007 andJune
      30, 2007,  respectively
            
            
            5,671,347
            
            
            
            5,648,996Inventories
            
            
            4,105,312
            
            
            
            4,191,790Notes
      receivable-current portion
            
            
            725,000
            
            
            
            725,000Advances
      to related parties
            
            
            8,374,496
            
            
            
            8,374,496Prepaid
      expenses and other current assets
            
            
            1,997,644
            
            
            
            1,169,175Total
      Current Assets
            
            
            24,363,194
            
            
            
            23,143,640Property
      and equipment, net
            
            
            7,170,981
            
            
            
            7,603,263Goodwill
            
            
            11,046,179
            
            
            
            11,139,542Intangible
      assets, net
            
            
            6,024,273
            
            
            
            5,970,303Deferred
      financing costs, net
            
            
            208,299
            
            
            
            225,430Security
      deposits
            
            
            80,818
            
            
            
            79,918Total
      Assets
            
            $
            48,893,744
            
            
            $
            48,162,096LIABILITIES
      & STOCKHOLDERS' EQUITYCurrent
      Liabilities:Line
      of credit
            
            $
            329,321
            
            
            $
            481,602Notes
      payable, current portion
            
            
            2,920,339
            
            
            
            3,236,168Capital
      leases payable, current portion
            
            
            383,778
            
            
            
            376,042Convertible
      debentures and notes payable, net of unamortizeddebt
      discounts of $1,440,499 and $1,784,233 as of September 30,
      2007and
      June 30, 2007, respectively
            
            
            1,608,668
            
            
            
            1,348,267Accounts
      payable and accrued expenses
            
            
            21,281,337
            
            
            
            17,711,401Customer
      pre-purchase payments and unearned revenues
            
            
            4,928,137
            
            
            
            3,615,087Total
      Current Liabilities
            
            
            31,451,580
            
            
            
            26,768,567Notes
      payable, less current portion
            
            
            3,594,153
            
            
            
            3,632,726Capital
      leases payable, less current portion
            
            
            628,925
            
            
            
            729,816Deferred
      income taxes
            
            
            76,000
            
            
            
            -Total
      Long Term Liabilities
            
            
            4,299,078
            
            
            
            4,362,542Total
      Liabilities
            
            
            35,750,658
            
            
            
            31,131,109COMMITMENTS
      AND CONTINGENCIESStockholders'
      Equity:Preferred
      Stock; par value $.001, authorized 10,000,000 shares;issued-none
            
            
            -
            
            
            
            -Common
      Stock; $.001 par value; 75,000,000 shares authorized;at
      September 30, 2007 and June 30, 200714,950,947
      shares issued and outstandingat
      both September 30, 2007 and June 30, 2007
            
            
            14,951
            
            
            
            14,951Additional
      paid in capital
            
            
            37,840,498
            
            
            
            37,840,498Accumulated
      deficit
            
            
            (21,981,169
            )
            
            
            (17,671,264
            )Notes
      and loans receivable-related parties
            
            
            (2,731,194
            )
            
            
            (3,153,198
            )Total
      Stockholders' Equity
            
            
            13,143,086
            
            
            
            17,030,987Total
      Liabilities and Stockholders' Equity
            
            $
            48,893,744
            
            
            $
            48,162,096




See
accompanying notes to condensed consolidated financial
statements


3




ABLE
ENERGY, INC. AND SUBSIDIARIES
 CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
 (Unaudited)




For
      the Three Months Ended
              September
      30,2007
            
            
            2006Net
      Sales
            
            $
            66,993,371
            
            
            $
            12,835,553Cost of Sales(exclusive
      of depreciation and amortizationshown
      separately below)
            
            
            63,561,115
            
            
            
            11,641,623Gross
      Profit
            
            
            3,432,255
            
            
            
            1,193,930Operating
      Expenses:Selling,
      general and administrative
            
            
            6,504,137
            
            
            
            2,287,109Depreciation
      and amortization
            
            
            558,247
            
            
            
            171,337Total
      Operating Expenses
            
            
            7,062,384
            
            
            
            2,458,446Loss
      from Operations
            
            
            (3,630,129
            )
            
            
            (1,264,516
            )Other
      Income (Expenses)Interest
      and other income
            
            
            251,005
            
            
            
            148,821Interest
      income - related parties
            
            
            80,385
            
            
            
            71,878Interest
      expense
            
            
            (436,133
            )
            
            
            (178,421
            )Amortization
      of deferred financing costs
            
            
            (17,131
            )
            
            
            (561,128
            )Amortization
      of debt discounts on convertible debenturesand note payable
            
            
            (343,734
            )
            
            
            (195,909
            )Registration
      rights penalty
            
            
            (138,168
            )
            
            
            (200,600
            )Total
      Other Income (Expenses) Net
            
            
            (603,776
            )
            
            
            (915,359
            )Net
      loss before provision for income taxes
            
            $
            (4,233,905
            )
            
            $
            (2,179,875
            )Provision
      for Income taxes
            
            
            76,000
            
            
            
            -Net loss
            
            $
            (4,309,905
            )
            
            $
            (2,179,875
            )Basic
      and diluted loss per common share
            
            $
            (0.29
            )
            
            $
            (0.70
            )Weighted
      average number of common shares outstanding-basic and
    diluted
            
            
            14,950,947
            
            
            
            3,133,731






See
accompanying notes to condensed consolidated financial
statements


4




ABLE
ENERGY, INC. AND SUBSIDIARIES CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)




For
      the three months ended
              September
      30,2007
            
            
            2007Cash
      flow from operating activities:Net
      loss
            
            $
            (4,309,905
            )
            
            $
            (2,179,875
            )Adjustments
      to reconcile net loss to net cashprovided
      by operating activities:Depreciation
      and amortization
            
            
            558,247
            
            
            
            171,337Provision
      for bad debts
            
            
            (5,547
            )
            
            
            27,130Amortization
      of discounts on convertible debentures and notes payable
            
            
            343,734
            
            
            
            195,909Amortization
      of deferred financing costs
            
            
            17,131
            
            
            
            561,128Accrual
      of interest income on note receivable and loan-related
    parties
            
            
            (69,327
            )
            
            
            -Stock
      - based compensation
            
            
            -
            
            
            
            17,837Gain
      on sale of property and equipment
            
            
            -
            
            
            
            (12,594
            )(Increase)
      decrease in operating assets:Accounts
      receivable
            
            
            (16,804
            )
            
            
            209,607Inventories
            
            
            86,477
            
            
            
            (332,040
            )Prepaid
      expenses and other current assets
            
            
            (829,675
            )
            
            
            (105,426
            )Due
      from broker
            
            
            
            
            
            
            (881,173
            )Security
      deposits
            
            
            (900
            )
            
            
            -Increase
      (decrease) in operating liabilities:Accounts
      payable and accrued expenses
            
            
            3,663,299
            
            
            
            579,457Customer
      pre - purchase payments and unearned revenue
            
            
            1,313,050
            
            
            
            2,574,368Deferred
      income taxes
            
            
            76,000
            
            
            
            -Net
      cash provided (used) by operating activities
            
            
            825,780
            
            
            
            825,665Cash
      flows from investing activities:Purchases
      of property and equipment
            
            
            (178,728
            )
            
            
            (243,718
            )Advances(repayment)
      to(from) related parties
            
            
            491,331
            
            
            
            (840,187
            )Deferred
      financing costs
            
            
            
            
            
            
            (540,000
            )Cash
      received on sale of property and equipment
            
            
            -
            
            
            
            13,886Net
      cash provided by investing activities
            
            
            312,603
            
            
            
            (1,610,019
            )Cash
      flows from financing activities:Net
      (repayments) borrowings under line of credit
            
            
            (152,281
            )
            
            
            (213,824
            )Repayment
      of notes payable
            
            
            (354,402
            )
            
            
            (18,583
            )Repayment
      of capital leases payable
            
            
            (93,155
            )
            
            
            (81,671
            )Proceeds
      from exercise of options
            
            
            -
            
            
            
            54,500Deferred
      financing costs
            
            
            -
            
            
            
            (179,798
            )Proceeds
      from sale of convertible debentures and notes payable
            
            
            -
            
            
            
            3,000,000Repayments
      of convertible debentures
            
            
            (83,333
            )
            
            
            -Net
      cash (used) provided by financing activities
            
            
            (683,171
            )
            
            
            2,560,624Net
      increase in cash and cash equivalents
            
            
            455,212
            
            
            
            1,776,270Cash
      and cash equivalents at beginning of period
            
            
            3,034,183
            
            
            
            2,144,729Cash
      and cash equivalents  at end of period
            
            $
            3,489,395
            
            
            $
            3,920,999Supplemental
      disclosure of cash flow information:Cash
      paid for interest
            
            $
            436,133
            
            
            $
            229,574Reduction
      in goodwill since certain liabilities were not assumed by
      Plazas
            
            $
            93,363
            
            
            $
            -Reclass
      of work in progress grouped with property and equipmentto
      intangible assets
            
            $
            312,538
            
            
            $
            -




See
accompanying notes to condensed consolidated financial statements
 5





ABLE
ENERGY, INC. AND SUBSIDIARIES


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (unaudited)





Note
1 - Basis of Presentation





The
accompanying unaudited condensed consolidated financial statements of Able
Energy, Inc. and Subsidiaries (the "Company") have been prepared in accordance
with United States generally accepted accounting principles applicable for
interim financial information. Accordingly, these condensed consolidated
financial statements do not include all of the information and footnotes
required by United States generally accepted accounting principles. In the
opinion of management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the three months ended September 30, 2007 are not necessarily
indicative of the results that may be expected for the year ending June 30,
2008. These condensed consolidated financial statements include the accounts of
Able Energy, Inc. and its wholly owned subsidiaries Able Oil Company Inc. (“Able
Oil”), Able Energy New York, Inc. (“Able NY”), Able Oil Melbourne, Inc.
(inactive, as of February 8, 2008), (“Able Melbourne”), Able Energy Terminal
LLC, PriceEnergy.com Franchising LLC (inactive), Able Propane, LLC (inactive),
and its majority owned (67.3%) subsidiary, PriceEnergy.com, Inc. (“PriceEnergy”)
and All American Plazas, Inc. (“Plazas”).  Able, together with its
operating subsidiaries, are hereby also referred to as the “Company”. Financial
results are considered to be of an immaterial nature as of September 30, 2007 as
they relate to the minority interest portion and therefore are not disclosed.
These condensed consolidated financial statements should be read in conjunction
with the consolidated financial statements and footnotes thereto included in the
Company's Annual Report on Form 10-K for the year ended June 30,
2007.





Since the
Company’s business combination with All American Plazas, Inc. (now known as All
American Properties, Inc.) on May 30, 2007, the Company is engaged in two
primary business activities, organized in two segments; the Oil Segment and the
Travel Plaza Segment.





The
Company’s Oil Segment, consisting of Able Oil, Able NY, Able Melbourne, Able
Energy Terminal, LLC and PriceEnergy, is engaged in the retail distribution of,
and the provision of services relating to, #2 home heating oil, propane gas,
kerosene and diesel fuels. In addition to selling liquid energy products, the
Company offers complete heating, ventilation and air conditioning (“HVAC”)
installation and repair and other services and also markets other petroleum
products to commercial customers, including on-road and off-road diesel fuel,
gasoline and lubricants.  Please refer to Note 18 - Subsequent Events,
for disclosure relating to the February 8, 2008 sale of the Able Melbourne
assets and liabilities; and the July 22, 2008 sale of 49% of the common stock of
Able NY and the Company’s Easton and Horsham, Pennsylvania operations (“Able
PA”) and the subsequent rights granted to the Company on October 31, 2008 to
repurchase those shares of stock in Able NY and the interest in Able
PA.





The
Company’s Travel Plaza Segment, operated by Plazas, is engaged in the retail
sale of food, merchandise, fuel, personal services, onsite and mobile vehicle
repair, services and maintenance to both the professional and leisure driver
through a current network of ten travel plazas, located in Pennsylvania, New
Jersey, New York and Virginia.





Note 2 - Going Concern, Liquidity and
Capital Resources and Management’s Plans





The
Company has incurred losses from continuing operations during the quarter ended
September 30, 2007 of approximately, $4.3 million resulting in an accumulated
deficit balance of approximately $22.0 million as of September 30,
2007.  Net cash provided by operations during the quarter ended
September 30, 2007, was approximately $0.8 million.  The Company had a
working capital deficiency of $7.1 million.  These factors raise
substantial doubt about the Company’s ability to continue as a going
concern.  These consolidated financial statements do not include any
adjustments relating to the recoverability of the recorded assets or the
classification of the liabilities that may be necessary should the Company be
unable to continue as a going concern.





On May
30, 2007, the Company completed a business combination with All American Plazas,
Inc. now known as All American Properties, Inc. (“Properties”) (See Note
16).  The Company is pursuing sales initiatives, cost savings and
credit benefits as contemplated in the business combination including
consolidation of business operations where management of the Company deems
appropriate for the combined entity. In order to conserve its capital resources
and to provide incentives for the Company’s employees and other service vendors,
the Company expects to continue to issue, from time to time, common stock and
stock options to compensate employees and non-employees for services
rendered. The Company is focusing on expanding its distribution programs
and new customer relationships to increase demand for its products. In addition,
the Company is pursuing other lines of business, which include expansion of its
current commercial business into other products and services such as solar
energy and other energy related home services. The Company is also evaluating,
on a combined basis, all of its product lines for cost reductions, consolidation
of facilities and efficiency improvements. There can be no assurance, however,
that the Company will be successful in achieving its operational improvements
which would enhance its liquidity situation.





The
Company has been funding its operations through an asset-based line of credit
and other financing facilities.





Through
the quarter ended September 30, 2007, the Company has issued notes receivable
and loans to other affiliates and to Properties, its largest stockholder, with a
balance at September 30, 2007 of approximately $2.7 million, including accrued
interest of approximately $0.3 million.  The Company has granted
Properties a series of extensions of the maturity of these
obligations.  These obligations are recorded as contra equity within
these condensed consolidated financial statements.  Included in the
balance for the quarter ended September 30, 2007, Properties has offset $0.5
million in rents payable due from the Travel Plaza Segment to Properties.




6


During
June 2007, The Company paid $8.4 of fuel invoices due by Properties on behalf of
Properties during the transition of the business combination.  This
resulted in an advance to related parties under current assets. As a result of
the Company paying these invoices Properties assumed accounts payable for the
Company in October 2007 while finalizing aspects of the business combination
(see Note 16)





The
Company will require some combination of the collection of Properties notes
receivable, new financing, restructuring of existing financing, improved
receivable collections and/or improved operating results in order to maintain
adequate liquidity over the course of the year ending June 30,
2008.   The Company must also bring current each of its
Securities and Exchange Commission (“SEC”) filings as part of a plan to raise
additional capital.  In addition to the filing of this Quarterly
Report on Form 10-Q for the quarter ended September 30, 2007, the Company must
also complete and file its Quarterly Reports on Form 10-Q for the quarters ended
December 31, 2007, March 31, 2008 and September 30, 2008 and its Annual Report
on Form 10-K for the year ended June 30, 2008.





There can
be no assurance that the financing or the cost saving measures as identified
above will be satisfactory in addressing the short-term liquidity needs of the
Company.  In the event that these plans cannot be effectively
realized, there can be no assurance that the Company will be able to continue as
a going concern.





Note
3 - Summary of Significant Accounting Policies





There
were no material changes to Significant Accounting Policies since the filing of
our Annual Report on Form 10-K for the year ended June 30, 2007





Note
4 - Recently Issued Accounting Pronouncements





In July
2006, the Financial Accounting Standards Board (“FASB”) issued FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an
interpretation of FASB Statement No. 109" ("FIN 48"), which clarifies the
accounting for uncertainty in tax positions. This interpretation requires that
the Company recognize in its consolidated financial statements, the impact of a
tax position, if that position is more likely than not of being sustained on
audit, based on the technical merits of the position. The provisions of FIN 48
are effective as of July 1, 2007, with the cumulative effect of the change in
accounting principle recorded as an adjustment to opening retained earnings. The
application of this statement did not have a material impact on the Company’s
consolidated financial statements.




In
September 2006, the FASB issued SFAS No.157, "Fair Value Measurements", which
defines fair value, establishes a framework for measuring fair value in United
States generally accepted accounting principles and expands disclosures about
fair value measurements. Adoption is required for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. Early adoption
of SFAS 157 is encouraged. The Company is currently evaluating the impact of
SFAS 157, and the Company will adopt SFAS 157 in the fiscal year beginning July
1, 2008.




In
September 2006, the staff of the SEC issued Staff Accounting Bulletin ("SAB")
No. 108, which provides interpretive guidance on how the effects of the
carryover or reversal of prior year misstatements should be considered in
quantifying a current year misstatement. SAB 108 became effective in fiscal
2007. Adoption of SAB 108 did not have a material impact on the Company's
consolidated financial position, results of operations or cash
flows.




In
September 2006, the FASB issued SFAS No. 158, “Employers Accounting for Defined
Pension and Other Postretirement Plans-an amendment of FASB No.’s 87, 88, 106
and 132(R).”  SFAS 158 requires an employer and sponsors of one or
more single employer defined plans to recognize the funded status of a benefit
plan; recognize as a component of other comprehensive income, net of tax, the
gain or losses and prior service costs or credits that may arise during the
period; measure defined benefit plan assets and obligations as of the employer’s
fiscal year; and enhance footnote disclosure.  For fiscal years ending
after December 15, 2006, employers with equity securities that trade on a public
market are required to initially recognize the funded status of a defined
benefit postretirement plan and to provide the enhanced footnote
disclosures.  For fiscal years ending after December 15, 2008,
employers are required to measure plan assets and benefit
obligations.  Management of the Company is currently evaluating the
impact of adopting this pronouncement on the consolidated financial
statements.




In
December 2006, the FASB issued FASB Staff Position ("FSP") EITF 00-19-2
"Accounting for Registration Payment Arrangements" ("FSP EITF 00-19-2") which
specifies that the contingent obligation to make future payments or otherwise
transfer consideration under a registration payment arrangement should be
separately recognized and measured in accordance with SFAS No. 5, "Accounting
for Contingencies." Adoption of FSP EITF 00-19-02 was required for fiscal years
beginning after December 15, 2006, and has not had a material impact on the
Company's consolidated financial position, results of operations or cash
flows.




7




In
February 2007, the FASB issued SFAS No. 159 "The Fair Value Option for Financial
Assets and Financial Liabilities-Including an amendment of FASB Statement No.
115", which permits entities to choose to measure many financial instruments and
certain other items at fair value. The fair value option established by this
Statement permits all entities to choose to measure eligible items at fair value
at specified election dates. A business entity shall report unrealized gains and
losses on items for which the fair value option has been elected in earnings at
each subsequent reporting date. Adoption is required for fiscal years beginning
after November 15, 2007. Early adoption is permitted as of the beginning of a
fiscal year that begins on or before November 15, 2007, provided the entity also
elects to apply the provisions of SFAS Statement No. 157, Fair Value
Measurements. The application of this statement has not had a material impact on
the Company’s consolidated financial statements.




In
December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in
Consolidated Financial Statements–an amendment of ARB No. 51.”  SFAS
160 establishes accounting and reporting standards pertaining to ownership
interests in subsidiaries held by parties other than the parent, the amount of
net income attributable to the parent and to the noncontrolling interest,
changes in a parent’s ownership interest, and the valuation of any retained
noncontrolling equity investment when a subsidiary is
deconsolidated.  This statement also establishes disclosure
requirements that clearly identify and distinguish between the interests of the
parent and the interests of the noncontrolling owners.  SFAS 160 is
effective for fiscal years beginning on or after December 15,
2008.  The Company is in the process of evaluating the effect that the
adoption of SFAS 160 will have on its consolidated results of operations,
financial position and cash flows.




In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
Combinations” (SFAS 141R).  SFAS 141R establishes principles and
requirements for how an acquirer recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, any
noncontrolling interest in the acquiree and the goodwill
acquired.  SFAS 141R also establishes disclosure requirements to
enable the evaluation of the nature and financial effects of the business
combination.  SFAS 141R is effective for financial statements issued
for fiscal years beginning after December 15, 2008.   The Company
is currently evaluating the potential impact of adoption of SFAS 141R on its
consolidated financial statements.




In March
2008, the FASB issued SFAS No. 161 “Disclosures about Derivative Instruments and
Hedging Activities”.  The new standard is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity’s financial statements issued for fiscal years and interim
periods beginning after November 15, 2008, with early adoption
encouraged.  The Company is currently evaluating the impact of
adopting SFAS No. 161 on its consolidated financial statements.




In May
2008, the FASB issued SFAS No. 162 “The Hierarchy of Generally Accepted
Accounting Principles”.  The new standard identifies the sources of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States (the GAAP hierarchy).  SFAS No. 162 will become
effective 60 days following the SEC’s approval of the Public Company Accounting
Oversight Board amendments to AU Section 411, The Meaning of Present Fairly
in Conformity With Generally Accepted Accounting Principles.  Adoption
of SFAS No. 162, upon its effectiveness, is not expected to have a material
impact on the Company's consolidated financial position, results of operations
or cash flows.





Note 5-
Net Loss per
Share





Basic net
loss per common share is computed based on the weighted average number of shares
outstanding during the periods presented. Common stock equivalents, consisting
of stock options, warrants, and convertible debentures and notes payable as
further discussed in the notes to the condensed consolidated financial
statements, were not included in the calculation of diluted loss per share
because their inclusion would have been anti-dilutive.





The total
common shares available for issuance upon the exercise of stock options and
warrants, and conversion of convertible debentures and note payable excluded
from comparative diluted loss per share was 7,102,524 and 6,760,346 for the
three months ended September 30, 2007 and 2006, respectively.








8




Note
6 - Inventories





Inventories
consisted of the following at:





September
      30,
            
            
            June
      30,2007
            
            
            2007Oil
      Segment:#2
      heating oil
            
            $
            272,735
            
            
            $
            327,757Diesel
      fuel
            
            
            43,083
            
            
            
            59,086Kerosene
            
            
            18,301
            
            
            
            10,176Propane
            
            
            64,472
            
            
            
            15,980Parts,
      supplies and equipment
            
            
            213,412
            
            
            
            213,484Total
      Oil Segment
            
            $
            612,003
            
            
            $
            626,483Travel Plaza
      Segment:Fuels
            
            $
            1,199,094
            
            
            $
            1,260,653Non-fuel
            
            
            2,294,215
            
            
            
            2,304,654Total
      Travel Plaza Segment
            
            $
            3,493,309
            
            
            $
            3,565,307Total
            
            $
            4,105,312
            
            
            $
            4,191,790





Note
7 - Notes Receivable





On March
1, 2004, the Company entered into two notes receivable totaling $1.4 million
related to the sale of its subsidiary, Able Propane LLC. The notes are secured
by substantially all the assets of Able Propane LLC. One note for $500,000 bears
interest at a rate of 6% per annum and the other note for $900,000 is
non-interest bearing. Principal is payable in annual installments and interest
is paid quarterly with the final maturity date of March 1, 2008 for both
notes.  The balance outstanding of these two notes as of September 30,
2007, was $725,000. In March 2008, the principal and interest due on the notes
was paid in full.





Note
8- Property and Equipment





Property
and equipment was comprised of the following:





September
      30,
              2007
            
            
            June
      30,
              2007Land
            
            $
            479,346
            
            
            $
            479,346Buildings
            
            
            1,674,124
            
            
            
            1,674,124Building
      improvements
            
            
            937,193
            
            
            
            906,685Trucks
      and autos
            
            
            4,540,011
            
            
            
            4,552,651Machinery
      and equipment
            
            
            1,804,071
            
            
            
            1,988,777Office
      furniture, fixtures and equipment
            
            
            1,372,415
            
            
            
            1,359,242Fuel
      tanks
            
            
            1,009,794
            
            
            
            1,008,129Cylinders
      – propane
            
            
            491,859
            
            
            
            486,309$
            12,308,813
            
            
            $
            12,455,263Less:
      accumulated depreciation
            
            
            (5,137,832
            )
            
            
            (4,852,000
            )Property
      and equipment, net
            
            $
            7,170,981
            
            
            $
            7,603,263





At
September 30, 2007, the Company had equipment under capital leases with a net
book value of approximately $1,346,744, which is included in the
above.





Depreciation
expense of property and equipment was $301,228, which includes an equipment
write off of $15,846 and $148,823 for the three months ended September 30, 2007
and 2006, respectively.




9


Note
9 – Deferred Financing Costs and Debt Discounts





The
Company incurred deferred financing costs in conjunction with the sale of
convertible debentures on July 12, 2005, July 5, 2006 and August 8, 2006 (see
Note 13), and notes payable on May 13, 2005 (see Note 11),.  These
costs were capitalized to deferred financing costs and are being amortized over
the term of the related debt.  Amortization of deferred financing
costs was $17,131 and $561,128 (this amount includes $540,000 that was
reclassified to amortization of deferred financing costs originally presented as
part of contra equity since the financing did not occur) for the three month
period ended September 30, 2007 and 2006, respectively.





Additionally,
in accordance with EITF 00-27, “Application of Issue 98-5 to Certain Convertible
Instruments”, the Convertible Debentures issued on July 12, 2005, July 5, 2006
and August 8, 2006 were considered to have a beneficial conversion premium
feature. The Company recorded a debt discount of $5,500,000 related to this
conversion premium and warrants issued in connection with the
financing.  The Company amortized $343,734 and $195,909 of debt
discount for the three months ending September 30, 2007, and 2006,
respectively.





Note
10 - Line Of Credit





On May
13, 2005, the Company entered into a $1,750,000 line-of-credit agreement (the
“Agreement”) with Entrepreneur Growth Capital, LLC (“EGC”). The loan is secured
by certain eligible accounts receivable, inventory and certain other assets as
defined in the agreement. The line bears interest at Citibank's prime rate, plus
4% per annum (11.25% at September 30, 2007 and 12.25% at June 30, 2007,
respectively) not to exceed 24%, with a minimum interest of $9,000 per month.
The line also requires an annual facility fee and monthly collateral management
fees equal to 2% and 0.025%, respectively. In addition, deposits are not
credited to our account until four business days after receipt by
EGC.  The balance due as of September 30, 2007 and June 30, 2007 was
$329,321 and $481,602, respectively, with an available balance as of September
30, 2007 of $1,420,679.  The Agreement renews annually unless
terminated by either party, as provided for in the Agreement.





Note
11 - Notes Payable





On May
13, 2005, the Company entered into a term loan with Northfield Savings Bank for
$3,250,000.  Principal and interest are payable in monthly
installments of approximately $21,400, commencing on July 1,
2005.  The note is secured by Company owned real property located in
Rockaway, New Jersey with a net book value of $866,495 at September 30, 2007 and
an assignment of leases and rents at such location. The initial interest rate is
6.25% per annum on the unpaid principal balance for the first five (5) years, to
be redetermined every fifth anniversary date (reset date) at 300 basis points
over the five (5) year United States Treasury rate, but not lower than the
initial rate; at that time the monthly payment will be redetermined. The
interest rate on default is 4% per annum, charged at the bank’s option, above
the interest rate then in effect.  At the maturity date of June 1,
2030, all amounts owed are due and payable. As of September 30, 2007, the
Company was in default of two non-financial covenants under the
agreement.  The Company has received a waiver covering all periods in
each of the fiscal years ending June 30, 2008 and 2007.  The balance
outstanding on this note at September 30, 2007 and June 30, 2007 was $3,119,577
and $3,134,991, respectively.





On
December 13, 2006, the Company entered into a five-year note agreement relating
to the purchase of the Horsham Franchise in the amount of
$345,615.  The interest rate is 7.0% per annum and principal and
interest is payable in monthly installments of $6,844 which commenced on January
13, 2007. The balance due on this note at September 30, 2007 and June 30, 2007
was $301,140 and $316,225, respectively.





On
January 8, 2007, Plazas entered into an Account Purchase Agreement with Crown
Financial (“Crown”) whereby Crown advanced $1,444,775 to Plazas in exchange for
certain existing accounts receivables and taking ownership of new accounts
originated by Plazas.  Repayment of the loan is to be made from the
direct payments to Crown from the accounts it purchased from Plazas and a fee
equal to 2.5% of the outstanding advance for the preceding period payable on the
15th
and 30th day of
each month.  The Crown loan is secured by the mortgages on the real
property and improvements thereon owned by Properties known as the Strattanville
and Frystown Gables truck stop plazas and a personal guarantee by Frank Nocito
an Executive Vice President of the company and through a family trust the
largest shareholder of the Company.  Subsequent to the May 2007
closing of the business combination between the Company and Properties, on July
1, 2007 the Account Purchase Agreement between Plazas and Crown Financial was
amended and modified from “Eligible Accounts having a 60 day aging” to a “90 day
aging that are not reasonably deemed to be doubtful for collections” and the fee
of 2.5% payable on the 15th and
30th
day of each month has been modified to 1.375%. The Company has assumed this
obligation based on the business combination; however, Properties has agreed to
continue to secure this financing with the aforementioned mortgages on real
property owned by Properties. The balance due on the Crown note at September 30,
2007 and June 30, 2007 was $1,324,775.





The
Company has similar credit card financing agreements for the Oil Segment and the
Travel Plaza Segment as explained below respectively.





On March
20, 2007, the Company’s Oil Segment entered into a credit card receivable
advance agreement with Credit Cash, LLC (“Credit Cash”) whereby Credit Cash
agreed to loan the Company $1,200,000. The loan is secured by the Company's
existing and future credit card collections.  Terms of the loan call
for a repayment of $1,284,000, which includes the one-time finance charge of
$84,000, over a seven-month period. This will be accomplished through Credit
Cash withholding 18% of credit card collections of Able Oil Company and 10% of
credit card collections of PriceEnergy.com, Inc. over the seven-month period
which began on March 21, 2007. There are certain provisions in the agreement
which allows Credit Cash to increase the withholding, if the amount withheld by
Credit Cash over the seven-month period is not sufficient to satisfy the
required repayment of $1,284,000. The balance due on this note at September
30, 2007 and June 30, 2007 was $705,831 and $493,521, respectively (see Note
18).




10




Prior to
the business combination between Properties and the Company, Properties entered
into a loan agreement with Credit Cash, which was an advance against credit card
receivables at the travel plazas then operated by Properties.  As a
result of the business combination, this obligation was assumed by the Company’s
newly formed, wholly-owned subsidiary, Plazas, as it became the operator of the
travel plazas. Credit Cash, while acknowledging the business combination, has
continued to obligate both Properties and Plazas in their loan documents as
obligors of the loan. On August 31, 2006, Plazas entered into a loan
agreement with EGC/Credit Cash, relating to the processing of its credit card
transactions, in the initial amount of $1,000,000.  The interest rate
is prime plus 3.75%. On July 16, 2007, Credit Cash agreed to extend further
credit of $400,000 secured by the credit card receivables at the travel plazas
operated by Plazas.  This July 16, 2007 extension of credit agreement
was in addition to and supplemented all previous agreements with Credit Cash.
Terms of the original loan and extensions called for repayment of $1,010,933
plus accrued interest which will be repaid through Credit Cash withholding 15%
of credit card collections from the operations of the truck stop plazas until
the loan balance is paid in full. The interest rate is prime plus 3.75% (12% at
September 30, 2007). There are certain provisions in the agreement, which allows
Credit Cash to increase the withholding, if the amount it is withholding is not
sufficient to satisfy the loan in a timely manner. This repayment percentage was
increased to 20% in April 2008 due to suspension of diesel sales in several
locations due to pricing and cash flow issues.  The 20% was
renegotiated in August 2008 down to 12%.  The outstanding balance of
the loan as of September 30, 2007 and June 30, 2007 was $620,493 and $1,160,235,
respectively (see Note 18).





In
addition, the Company has entered into miscellaneous loan agreements with
outstanding balances totaling $442,676, as of September 30, 2007.





Maturities
on notes payable as of September 30, 2007 are as follows:




For
      the Period Ending September 30, 2007Year
            
            
            Amount2008
            
            
            $
            2,920,3392009
            
            
            
            281,2752010
            
            
            
            256,1142011
            
            
            
            199,1992012
            
            
            
            102,565Thereafter
            
            
            
            2,755,000Total
            
            $
            6,514,492Less
      current
            
            
            2,920,339Net,
      long-term
            
            $
            3,594,153





Note
12 - Capital Leases Payable





The
Company has entered into various capital leases for equipment expiring through
January 2012, with current aggregate monthly payments of approximately
$38,000.




11




The
following is a schedule by years of future minimum lease payments under capital
leases together with the present value of the net minimum lease payments as of
September 30, 2007:





For
      the Period Ending September 30, 2007Year
            
            Amount2008
            
            $
            454,8122009
            
            
            338,3542010
            
            
            196,1582011
            
            
            131,0592012
            
            
            34,898Total
      Minimum Lease Payments
            
            $
            1,155,281Less
      amount representing interest (ranging from 8 - 12%)
            
            
            142,578Present
      value of net minimum lease payments
            
            
            1,012,703Less
      Current portion
            
            
            383,778Net
      long term minimum lease payments
            
            $
            628,925





Note
13 - Convertible Debentures and Convertible Notes Payable





On July
12, 2005, the Company consummated a financing in the amount of $2,500,000
through the sale of Variable Rate Convertibles Debentures (the "Convertible
Debentures"). As of September 30, 2007, the convertible debt outstanding on the
Convertible Debentures was $132,500.  Amortization of debt discounts
on this convertible note payable amounted to approximately $7,700 and $179,000
for the three month period ended September 30, 2007and September 30, 2006
respectively. The debt discount associated with this was fully amortized as of
September 30, 2007.





On July
5, 2006, the Company closed a Securities Purchase Agreement entered into on June
30, 2006 whereby it sold a $1.0 million convertible term note, due June 30,
2009, to Laurus Master Fund, Ltd. ("Laurus") and issued a 5 year warrant for
160,000 shares of the Company’s common stock Amortization of debt discounts on
this convertible note payable amounted to approximately $84,000 and $80,000 for
the three month period ended September 30, 2007 and September 30, 2006
respectively, and the unamortized portion was approximately $586,000 as of
September 30, 2007.





On August
6, 2006, the Company issued $2,000,000 of convertible debentures to certain
investors, due on August 8, 2008 and issued 5 year warrants to purchase 672,667
shares of the Company’s common stock.  Amortization of debt discount
on these convertible debentures was approximately $252,000 and 100,000 for the
three month period ended September 30, 2007 and September 30, 2006, respectively
and the unamortized portion was approximately $855, 000 at September 30,
2007.





As of
September 30, 2007, the Company’s future debt discount to be amortized
was:




Year
              
              Amount2008
              
              $
              1,001,8342009
              
              
              438,6652010
              
              
              -Total
              
              $
              1,440,499




12


Note
14-Stockholders’ Equity




For
      The Quarter Ended September 30, 2007Common
      Stock
              
              
              Additional
                Paid-in
              
              
              Accumulated
              
              
              Notes
      and
                Loans
                Receivable
      -
              
              
              Total
                Stockholders'Shares
              
              
              Amount
              
              
              Capital
              
              
              Deficit
              
              
              Related
      Parties
              
              
              EquityBalance
      June 30, 2007
              
              
              14,950,947
              
              
              $
              14,951
              
              
              $
              37,840,498
              
              
              $
              (17,671,264
              )
              
              $
              (3,153,198
              )
              
              $
              17,030,987Reduction
      in notes receivable from related partiesfor
      reimbursement of certain fees
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              491,331
              
              
              
              491,331Increase
      in notes receivablefor
      accrued interest
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (69,327
              )
              
              
              (69,327
              )Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (4,309,905
              )
              
              
              -
              
              
              
              (4,309,905
              )Balance
      September 30, 2007
              
              
              14,950,947
              
              
              $
              14,951
              
              
              $
              37,840,498
              
              
              $
              (21,981,169
              )
              
              $
              (2,731,194
              )
              
              $
              13,143,086


Stock
Options





A summary
of the Company's stock option activity and related information for the three
month period ended September 30, 2007 is as follows:




Number
      of
              Options
            
            
            Weighted
      Average Exercise PriceOutstanding
      June 30, 2007
            
            
            400,040
            
            
            $
            2.74Granted
            
            
            -
            
            
            
            -Exercised
            
            
            -
            
            
            
            -Forfeited
            
            
            -
            
            
            
            -Outstanding
      September 30, 2007
            
            
            400,040
            
            
            $
            2.74





During
the three month period ended September 30, 2007, no options or warrants were
issued or exercised.





The
following is a summary of stock options outstanding and exercisable at September
30, 2007 by exercise price range:





Exercise
      Price
              Range
            
            
            Number
      of
              Options
            
            
            Weighted-
              Average
              Remaining
              Contractual
              Life
      (Years)
            
            
            Weighted-
              Average
              Exercise
              Price
            
            
            Intrinsic
      Value$
            2.55
      - $ 4.36
            
            
            
            30,000
            
            
            
            1.5
            
            
            $
            2.86
            
            
            $
            101,675$
            8.09
      - $ 8.32
            
            
            
            49,000
            
            
            
            3.6
            
            
            
            8.20
            
            
            
            -$
            1.90
            
            
            
            321,040
            
            
            
            10.0
            
            
            
            1.90
            
            
            
            536,137Totals
            
            
            
            400,040
            
            
            
            8.6
            
            
            $
            2.74
            
            
            $
            637,812





Equity
Plans





The Able
Energy, Inc.’s 1999 Employee Stock Option Plan, as amended, permits stock option
awards up to 700,000 shares of the Company's common stock to be granted to
directors, employees and consultants of the Company.  This plan states
that unless otherwise determined by the Board of Directors, an option shall be
exercisable for ten years after the date on which it was
granted.  Vesting terms are set by the Board of
Directors.  There are 84,250 options remaining available for issuance
under this plan at September 30, 2007.





The Able
Energy, Inc. 2000 Employee Stock Purchase Plan, which was approved by the
stockholders on June 23, 2000, permits stock option awards up to 350,000 shares
of the Company's common stock to be granted to employees of the Company. There
are 350,000 shares remaining available for issuance under this plan at September
30, 2007.




13




The Able
Energy, Inc. 2000 Stock Bonus Plan, which was approved by the stockholders on
June 23, 2000, permits restricted stock awards up to 350,000 shares of the
Company's common stock to be granted to directors, employees and consultants of
the Company. There are 338,000 shares remaining available for issuance under
this plan at September 30, 2007.





The Able
Energy, Inc. 2005 Incentive Stock Plan, which was approved by the stockholders
on May 25, 2005, permits stock option, common stock, and restricted common stock
purchase offer awards of up to 1,000,000 shares of the Company's common stock to
be granted to directors, employees and consultants of the
Company.  There are 678,960 shares remaining available for issuance
under this plan at September 30, 2007.





Warrants





A summary
of the Company’s stock warrant activity, and related information for the quarter
ended September 30, 2007 is as follows:




Number
      of
                Warrants
              
              
              Weighted
                Average
                Exercise
                PriceOutstanding
      June 30, 2007
              
              
              6,164,976
              
              
              $
              7.20Granted
              
              
              -
              
              
              
              -Exercised
              
              
              -
              
              
              
              -Forfeited
              
              
              -
              
              
              
              -Outstanding
      September 30, 2007
              
              
              6,164,976
              
              
              $
              7.20


Preferred
Stock





The
Certificate of Incorporation authorizes the issuance of 10,000,000 shares of
preferred stock, $.001 par value per share, with designations, rights and
preferences determined from time to time by the Board of
Directors.  Accordingly, the Company’s Board of Directors is
empowered, without stockholder approval, to issue classes of Preferred Stock
with voting, liquidation, conversion, or other rights.  To date, no
preferred stock has been issued.





Voluntary
NASDAQ Delisting





On
October 4, 2006, the Company announced its intention to voluntarily delist the
Company's common stock from the NASDAQ Capital Market, effective as of the start
of trading on October 13, 2006. The Company's common stock is currently quoted
on the Pink Sheets. The management of the Company has indicated that the Company
will seek to have its common stock quoted on the OTC Bulletin Board as soon
as it qualifies for listing following the filing of this
Quarterly Report on Form 10-Q, the December 31, 2007 Quarterly Report on
Form 10-Q, the March 31, 2008 Quarterly Report on Form 10-Q, the September 30,
2008 Quarterly Report on Form 10-Q  and the June 30, 2008 Annual
Report on Form 10-K for the year ended June 30, 2008.





Note
15 - Commitments and Contingencies





Employment
Agreements





On
October 12, 2005, the Company entered into a one-year employment agreement with
Gregory Frost, the Company’s CEO (who was on a paid leave of absence from
September 28, 2006 through May 23, 2007). Pursuant to the agreement, he was
compensated at an annual salary of $250,000 and will be eligible for an annual
bonus and stock option grants, which will be separately determined by the
Compensation Committee of the Board of Directors. Pursuant to the agreement, the
employment with Mr. Frost was automatically renewed through October 11,
2008.




14


Operating
Leases





The
Company is obligated under certain property and equipment non-cancelable
operating lease agreements.  The rental properties include a lease of
the Company’s headquarters in Rockaway, New Jersey, office space in New York
City, office space in Easton, Pennsylvania and eleven full service travel plaza
facilities located in Pennsylvania, New York, New Jersey and Virginia. The Oil
Segment leases expire at various dates through May, 2010 while ten of the eleven
Travel Plaza Segment leases expire on September 30, 2009 and one with two
separate leases each expiring on January 1, 2011 and February 28,
2009.  The lease expiring in 2009 has five year renewable options
through 2028.  Rent expense was $1,846,419 for the period ended
September 30, 2007.  The ten Travel Plaza Segment leases that expire
on September 30, 2009 automatically renew for consecutive one year terms for up
to ten years from the initial lease, upon the mutual consent of both
parties.  Properties has waived the percentage rent amounts and
percentage increase in the base lease amount. The base amount of the leases will
remain fixed at the initial year amount unless both parties agree to an increase
or decrease in the base amount.  It is anticipated that the leases
will be renewed for annual periods through at least June 30, 2017. The Company
also acquired a ten year option to acquire any of the travel plaza real estate
owned by Properties, providing that the Company assume all existing debt
obligations related to the applicable properties.  The option has been
valued at $5.0 million and is exercisable as long as the Plaza’s leases relating
to the applicable real estate remain in effect.  Please refer to Note
18 – Subsequent Events, for disclosure relating to the sublease of certain of
the travel plaza facilities.





Purchase
Commitments





The
Company’s Oil Segment is obligated to purchase #2 heating oil under various
contracts with its suppliers. As of September 30, 2007 total open commitments
under these contracts are approximately $5.2 million and expire on various dates
through the end of August 2008.  The Company’s Travel Plaza Segment
has no open commitments for purchases.





Major
Vendors





The
Company’s Oil Segment purchases fuel supplies on the spot market. During the
period ended September 30, 2007, the Oil Segment satisfied its inventory
requirements through seven different suppliers, the majority of which have
significant domestic fuel sources, and many of which have been suppliers to us
for over five years.





The
Company’s Travel Plaza Segment is also subject to spot market pricing and its
fluctuations.  It utilizes three major suppliers for its fuel source
needs.





Litigation





Following
an explosion and fire that occurred at the Company's facility in Newton, New
Jersey on March 14, 2003, and through the subsequent clean up efforts, the
Company has cooperated fully with all local, state and federal agencies in their
investigations into the cause of this accident.  A lawsuit (known as
Hicks vs. Able Energy, Inc.) was filed against the Company by residents who
allegedly suffered property damages as a result of the March 14, 2003 explosion
and fire. The Company's insurance carrier is defending the Company as it related
to compensatory damages. The Company has retained separate legal counsel to
defend the Company against the punitive damage claims. On June 13, 2005, the
Court granted a motion certifying a plaintiff class action which is defined as
"All Persons and Entities that on and after March 14, 2003, residing within a
1,000 yard radius of Able Oil Company's fuel depot facility and were damaged as
a result of the March 14, 2003 explosion".  The Company sought and
received Court permission to serve interrogatories to all class members and in
November 2007 answers to interrogatories were received by less than 125 families
and less than 15 businesses. The Company successfully moved to exclude any and
all persons and entities form the class that did not previously provide answers
to interrogatories. The class certification is limited to economic loss and
specifically excludes claims for personal injury from the Class Certification.
The Company believes that the Class claims for compensatory damages are within
the available limits of its insurance. On September 13, 2006, the plaintiff’s
counsel made a settlement demand of $10,000,000, which the Company believes to
be excessive and the methodology upon which is fundamentally flawed. On May 7,
2008, this matter entered mediation. Mediation has not been successful, but the
Company remains open to reasonable settlement discussions with the plaintiffs.
The Company intends to vigorously defend the claim.





In
addition to the class action, seven property owners, who were unable to reach
satisfactory settlements with the Company’s insurance carrier, filed lawsuits
for alleged property damages suffered as a result of the March 14, 2003
explosion and fire. Subsequently, the Company’s insurance carrier has entered
into settlement agreements with four of the property owners.  The
Company's insurance carrier is defending the Company as it related to the
remaining three property damage claims. The Company’s counsel is defending
punitive damage claims. The Company believes that compensatory damage claims are
within the available limits of insurance and reserves for losses have been
established, as deemed appropriate, by the insurance carrier. There were a total
of 227 claims filed against the Company for property damages and 224 claims have
been settled by the Company’s insurance carrier resulting in the remaining three
lawsuits as described in this paragraph. The Company believes the remaining
three unsettled lawsuits will not have a material adverse effect on the
Company’s consolidated financial condition or operations.





Management
believes it has adequate insurance coverage to cover material legal settlements,
if any, and material litigation expenses.  Management does not believe
that legal accruals are required at September 30, 2007, and none have been
recorded.  The Company has been involved in non-material lawsuits in
the normal course of business. These matters are handled by the Company’s
insurance carrier.  The Company believes that the outcome of the above
mentioned legal matters will not have a material effect on the Company’s
consolidated financial statements.




15




On June
26, 2007, the Company and its affiliate, Properties (together with the Company
the “Claimants”), filed a Demand for Arbitration and Statement of Claim in the
Denver, Colorado office of the American Arbitration Association against Manns
Haggerskjold of North America, Ltd. (“Manns”), Scott Smith and Shannon Coe
(collectively the “Respondents”), Arbitration Case No. 77 148 Y 00236 07 MAV.
The Statement of Claim filed seeks to recover fees of $1.2 million paid to Manns
to obtain financing for the Company and Properties. The Claimants commenced the
Arbitration proceeding based upon the Respondents breach of the September 14,
2006 Commitment letter from Manns to Plazas that required Manns to loan Plazas
$150 million. The Statement of Claim sets forth claims for breach of contract,
fraud and misrepresentation and lender liability. On July 23, 2007, Respondents
filed their answer to the Statement of Claim substantially denying the
allegations asserted therein and interposing counterclaims setting forth claims
against the Company for breach of the Non-Circumvention Clause, breach of the
Exclusivity Clause and unpaid expenses. Respondents also assert counterclaims
for fraudulent misrepresentation and unjust enrichment. On Respondents’
counterclaim for breach of the Non-Circumvention Clause, Respondents claim
damages of $6,402,500. On their counterclaim for breach of the Exclusivity
Clause, Respondents claim damages of $3,693,750, plus an unspecified amount
related to fees on loans exceeding $2,000,000 closed by Properties or the
Company over the next five years. Respondents do not specify damages relative to
their other counterclaims.





On August
7, 2007, the Claimants filed their reply to counterclaims denying all of
Respondents material allegations therein. Respondents’ counterclaims were based
on the false statement that the Claimants had, in fact, received the financing
agreed to be provided by Manns from a third party.  The Respondents
subsequently withdrew all of their counterclaims.





The
parties have selected an Arbitrator and are presently engaged in
discovery.  The parties have exchanged documents and the depositions
of the parties have commenced and are scheduled to be concluded by the end of
October, 2008.  The hearing of the parties’ claims is scheduled to
commence before the Arbitrator on December 8, 2008.





On August
31, 2007, the Company was served with a second subpoena duces tecum (the “Second
Subpoena”) from the SEC pursuant to the Formal Order of Investigation issued by
the SEC on September 7, 2006. The Company continues to gather, review and
produce documents to the SEC and is cooperating fully with the SEC in complying
with the Second Subpoena. As of the date of this Report, the Company has
produced and will, if required, continue to produce responsive documents and
intends to continue cooperating with the SEC in connection with the
investigation.  On May 13, 2008, the Company received correspondence
from the SEC requesting the Company respond, in writing, to eleven questions
proffered by the SEC staff.  The Company provided its responses
to the eleven questions to the SEC on May 21, 2008.





On July
29 and 30, 2008, the Company’s CEO, Mr. Frost and the Company’s Executive
Vice-President, Business Development, Mr. Nocito, were deposed by the
SEC.  The Company has been advised by its SEC counsel, who also
attended the depositions that it believes the primary focus of the investigation
is for the Company to complete its outstanding, delinquent SEC filings in order
to obtain filing compliance.  Please refer to Note 18 – Subsequent
Events for disclosure relating to other legal proceedings involving the
Company.





Note
16 - Related Party Transactions





Axis
Consulting





On August
27, 2007 the Company’s subsidiary, PriceEnergy.com, Inc., entered into a service
agreement with Axis Consulting Services, LLC. The agreement calls for Axis
Consulting to develop marketing plan (phase 1) and manage (phase 2) “The Energy
Store” (an e-commerce retail sales portal for energy products and services).
During phase 1, the terms are $2,750 per month and once phase 2 commences an
amount of $5,600 per month. This agreement ends on December 31,
2008.  Axis Consulting’s President (Joe Nocito) has a direct
relationship as the son of the Company’s Executive Vice-President Frank
Nocito.





PriceEnergy.com





As of
September 30, 2007 a total of four current officers, a former officer and a
related party of the Company own 32.7% of the common stock of the subsidiary,
PriceEnergy.com, which was incorporated in November 1999. The Company holds the
remaining shares of PriceEnergy.com.





Acquisition
of Assets of Properties





At
September 30, 2007, Properties owns approximately 83% of the Company’s
outstanding common stock.  Approximately 85.0% of the common stock of
Properties is owned by the Chelednik Family Trust, a trust established by Mr.
Nocito, an officer of the Company and his wife for the benefit of their
family.   The balance of the outstanding common stock of
Properties is owned by a limited liability company owned by Gregory D. Frost,
the Chief Executive Officer and Chairman of the Board of Directors of the
Company.





Properties
Financing





On July
5, 2006, the Company received $1,000,000 from Laurus in connection with the
issuance of a convertible term note.  Of the proceeds received from
Laurus in connection with the issuance of the convertible term note, the Company
loaned $905,000 to Properties in exchange for a note
receivable.  Properties used such proceeds to pay (i) certain
obligations of CCI Group, Inc. (“CCIG”) and its wholly-owner subsidiary, Beach
Properties Barbuda Limited (“BPBL”), which owned and operated an exclusive
Caribbean resort hotel known as the Beach House located on the island of
Barbuda, and (ii) a loan obligation owed by BPBL to Laurus which loan was used
by CCIG to acquire the Beach House.  Properties had previously
acquired a 70% interest in CCIG pursuant to a Share Exchange
Agreement.  The Company received from Laurus a notice of a claim of
default dated January 10, 2007.  Laurus claimed default under section
4.1(a) of the Term Note as a result of non-payment of interest and fees in the
amount of $8,826 that was due on January 5, 2007, and a default under sections
6.17 and 6.18 of the securities purchase agreement for “failure to use best
efforts (i) to cause CCIG to provide Holder on an ongoing basis with
evidence that any and all obligations in respect of accounts payable of the
project operated by CCIG’s subsidiary, BPBL, have been met; and (ii) cause CCIG
to provide within 15 days after the end of each calendar month,
unaudited/internal financial statements (balance sheet, statements of income and
cash flow) of the Beach House and evidence that BPBL and the Beach House are
current in all of their ongoing operational needs”.




16


The
aforementioned interest and fees were paid by the Company on January 11, 2007.
Further, the Company has used its best efforts to cause CCIG to provide reports
and information to Laurus as provided for in the securities purchase
agreement.





In
connection with the claim of default, Laurus claimed an acceleration of maturity
of the principal amount of the Note of $1,000,000 and approximately $154,000 in
default payment (“Default Payment”) as well as accrued interest and fees of
approximately $12,000. On March 7, 2007, Laurus notified the Company that, it
waived the event of default and that Laurus had waived the requirement for the
Company to make the Default Payment.





In
consideration for the loan, Properties has granted the Company an option, (the
“Option") exercisable in the Company's sole discretion, to acquire 80% of the
CCIG stock Properties acquired from CCIG pursuant to the Share Exchange
Agreement. In addition, in the event that the Company exercises the Option, 80%
of the outstanding principal amount of the Properties note will be cancelled and
shall be deemed fully paid and satisfied. The remaining principal balance of the
Properties note and all outstanding and accrued interest on the loan shall be
due and payable one year from the exercise of the Option. The Option must be
exercised in whole and not in part and the Option expires on July 5, 2008. The
Company did not exercise the Option prior to its expiration.  In the
event the Company does not exercise the Option, the Properties note shall be due
in two years, on July 6, 2008, unless the Company has issued a declaration of
intent not to exercise the Option, in which case the Properties note shall be
due one year from such declaration. The Company has determined, that given the
lack of liquidity in the shares of CCIG and the lack of information in regard to
the financial condition of CCIG, that this option has no value and has not been
recorded by the Company.





The
Company loaned Properties $1,730,000 as evidenced by a promissory note dated
July 27, 2005. As of September 30, 2007, this note was still outstanding with an
original maturity date of June 15, 2007. The interest income related to this
note for the period ended September 30, 2007 was $53,112.  The note
and accrued interest receivable in the amount of $1,601,099 have been classified
as contra-equity on the Company’s consolidated balance sheet as of September 30,
2007. As of September 30, 2007, the balance of this note and accrued interest
has been offset by $416,937 in rents payable by Plazas to Properties pursuant to
the leases for the travel plazas.





The
Company receives rent from Properties for office space occupied by Properties in
the Company’s New York City offices.  The Company has reduced gross
rent expense included in sales, general and administrative expenses in the
condensed consolidated statements of operations in the amount of $28,510 for the
quarter ended September 30, 2007.  The amount of $102,904 at September
30, 2007 for the accrued balance due was reduced by an offset of rents payable
from Plazas to Properties pursuant to the lease for the travel
plazas.





On June
1, 2005, Properties completed a financing that, may impact the Company. Pursuant
to the terms of the Securities Purchase Agreement (the "Agreement") among
Properties and certain purchasers (“Purchasers”), the Purchasers loaned
Properties an aggregate of $5,000,000, evidenced by Secured Debentures dated
June 1, 2005 (the "Debentures"). The Debentures were due and payable on
June 1, 2007, subject to the occurrence of an event of default, with interest
payable at the rate per annum equal to LIBOR for the applicable interest period,
plus 4% payable on a quarterly basis on April 1st, July
1st,
October 1st and
January 1st,
beginning on the first such date after the date of issuance of the
Debentures.  Upon the May 30, 2007 completion of the business
combination with Properties and the Company’s board approving the transfer of
the debt that would also require the transfer of additional assets from
Properties as consideration for the Company to assume this debt, then the
Debentures are convertible into shares of our common stock at a conversion rate
of the lesser of (i) the purchase price paid by us for issuance of our
restricted common stock for the assets of Properties upon completion of the
business combination, or (ii) $3.00, subject to further adjustment as set forth
in the agreement.





The loan
is secured by real estate property owned by Properties in Pennsylvania and New
Hampshire.  Pursuant to the Additional Investment Right (the “AIR
Agreement”) among Properties and the Purchasers, the Purchasers may loan
Properties up to an additional $5,000,000 of secured convertible debentures on
the same terms and conditions as the initial $5,000,000 loan, except that the
conversion price will be $4.00.  Pursuant to the Agreement, these
Debentures are in default, as Properties did not complete the business
combination with the Company prior to the expiration of the 12-month anniversary
of the Agreement.





Subsequent
to the consummation of the business combination, we may assume the obligations
of Properties under the Agreement.  However, the Company’s board of
directors must approve the assumption of this debt which requires that
Properties transfer additional assets or consideration for such assumption of
debt.  Based upon these criteria, it is highly unlikely the Company
will assume the obligations of Properties, including the Debentures and the AIR
Agreement, through the execution of a Securities Assumption, Amendment and
Issuance Agreement, Registration Rights Agreement, Common Stock Purchase Warrant
Agreement and Variable Rate Secured Convertible Debenture Agreement, each
between the Purchasers and us (the “Able Energy Transaction
Documents”).  Such documents provide that Properties shall cause the
real estate collateral to continue to secure the loan, until the earlier of full
repayment of the loan upon expiration of the Debentures or conversion by the
Purchasers of the Debentures into shares of our common stock at a conversion
rate of the lesser of (i) the  price of the restricted common stock of
Able issued to Properties for the purchase of Properties’ assets in connection
with the closing of the Company’s business combination with Properties , or (ii)
$3.00, (the “Conversion Price”), subject to further adjustment as set forth in
the Able Energy Transaction Documents.  However, the Conversion Price
with respect to the AIR Agreement shall be $4.00.  In addition, the
Purchasers shall have the right to receive five-year warrants to purchase
2,500,000 of our common stock at an exercise price of $3.75 per
share.  Pursuant to the Able Energy Transaction Documents, we also
have an optional redemption right (which right shall be mandatory upon the
occurrence of an event of default) to repurchase all of the Debentures for 125%
of the face amount of the Debentures plus all accrued and outstanding interest,
as well as a right to repurchase all of the Debentures in the event of the
consummation of a new financing in which we sell securities at a purchase price
that is below the Conversion Price.  The stockholders of Properties
have agreed to escrow a sufficient number of shares to satisfy the conversion of
the $5,000,000 in outstanding Debentures in full.




17


During
the period June 1, 2007 through June 30, 2007, Plazas made $8,374,496 in
payments to its fuel supplier, TransMontaigne Product Services, Inc.
(“TransMontaigne”) on behalf of Properties during the transition of the
acquisition.  These payments were not made from any capital infusion
or advance made by Plazas, but rather from revenues from the ongoing operations
of the Travel Plazas. These payments were included in the advance to related
party receivable balance at June 30, 2007 (See Note 18). The offset of this
receivable occurred in October in conjunction with the note agreement of October
5, 2007, amended and restated on November 30, 2007.





Manns
Haggerskjold of North America, Ltd. (“Manns”) Agreement





On May
19, 2006, the Company entered into a letter of interest agreement with Manns,
for a bridge loan to the Company in the amount of $35,000,000 and a possible
loan in the amount of $100 million based upon the business combination with
Properties ("Manns Agreement"). The terms of the letter of interest provided for
the payment of a commitment fee of $750,000, which was non-refundable to cover
the due-diligence cost incurred by Manns. On June 23, 2006, the Company advanced
to Manns $125,000 toward the Manns Agreement due diligence fee. During the
period from July 7, 2006 through November 17, 2006, the Company advanced an
additional $590,000 toward the Manns Agreement due diligence fee. The amount
outstanding relating to these advances as of June 30, 2007 was
$715,000.  As a result of not obtaining the financing (see below), the
entire $715,000 was expensed to amortization of deferred financing costs in the
year ended June 30, 2007.





As a
result of the Company receiving a Formal Order of Private Investigation from the
SEC on September 22, 2006, the Company and Manns agreed that the commitment to
fund being sought under the Manns Agreement would be issued to Properties, since
the Company’s stockholders had approved a business combination with Properties
and since the collateral for the financing by Manns would be collateralized by
real estate owned by Properties. Accordingly, on September 22, 2006, Properties
agreed that in the event Manns funds a credit facility to Properties rather than
the Company, upon such funds being received by Properties, it will immediately
reimburse the Company for all expenses incurred and all fees paid to Manns in
connection with the proposed credit facility from Manns to the
Company.  On or about February 2, 2007, Properties received a term
sheet from UBS Real Estate Investments, Inc. (“UBS”) requested by Manns as
co-lender to Properties. Properties rejected the UBS offer as not consistent
with the Manns’ commitment of September 14, 2006. Properties subsequently
demanded that Manns refund all fees paid to Manns by Able and Properties. In
order to enforce its rights in this regard, Properties has retained legal
counsel and commenced an arbitration proceeding against Manns and its
principals. The Company and Properties intend to pursue their remedies against
Manns. All recoveries and fees and costs of the litigation will be allocated
between the Company and Properties in proportion to the amount of the Manns due
diligence fees paid





Note
Receivable-Related Parties





In
connection with two loans entered into by the Company in May 2005, fees in the
amount of $167,500 were paid to Unison Capital Corporation (“Unison”), a company
controlled by Mr. Nocito, an officer of the Company. This individual also has a
related-party interest in Properties.  Subsequent to the payments
being made and based on discussions with Unison, it was determined the $167,500
was an inappropriate payment and Unison agreed to reimburse this amount to the
Company over a twelve month period beginning in October 2005. As of September
30, 2007 no payments were made and this note was still
outstanding.  The Company extended the maturity date of the note to
January 15, 2008, which was further extended to March 15, 2008.  The
note has been personally guaranteed by Mr. Nocito.  The interest of
$24,313 has been accrued through September 30, 2007.  This note and
accrued interest was paid in full during the third quarter of fiscal year
2008.





Note
17 - Segment reporting





Since the
Company’s business combination with All American Plazas, Inc. on May 30, 2007,
the Company is engaged in two primary business activities, organized in two
reporting segments; the Oil Segment and the Travel Plaza Segment.  The
Company’s senior management manages the businesses and the expected long-term
financial performance of each segment.  The accounting policies of the
segments are the same. There are no intersegment sales for any of the periods
presented below.





18


The
Company’s Oil Segment, consisting of Able Oil, Able NY, Able Melbourne, Able
Energy Terminal, LLC and PriceEnergy, is engaged in the retail distribution of,
and the provision of services relating to, #2 home heating oil, propane gas,
kerosene and diesel fuels. In addition to selling liquid energy products, the
Company offers complete heating, ventilation and air conditioning (“HVAC”)
installation and repair and other services and also markets other petroleum
products to commercial customers, including on-road and off-road diesel fuel,
gasoline and lubricants.





The
Company’s Travel Plaza Segment, consisting of Plazas, is engaged in the retail
sale of food, merchandise, fuel, personal services, onsite and mobile vehicle
repair, services and maintenance to both the professional and leisure driver
through a current network of ten travel plazas, located in Pennsylvania, New
Jersey, New York and Virginia.





The
following unaudited proforma statements of operations represent consolidated
results of operations of the Company had the acquisition of Plazas and Able
Oil Montgomery, Inc. occurred for the proceeding fiscal year, summarized as
follows:






(Unaudited)
            
            For
      the three months endingSeptember
      30, 2006Net
      revenue
            
            $
            67,619,455Net
      loss
            
            $
            (5,209,791
            )Basic
      and diluted (loss) per share
            
            $
            (0.35
            )





The
following is the segment reporting for entities in existence at September 30,
2007 and comparisons to September 30, 2006 and June 30, 2007:











19




Quarter
      Ended September 30,2007
              
              
              2006RevenuesOil
      Segment:#2
      heating oil
              
              $
              5,152,566
              
              
              $
              6,107,271Gasoline,
      diesel fuel, kerosene, propane & other lubricants
              
              
              4,466,692
              
              
              
              6,111,720Equipment,
      sales & installation
              
              
              583,624
              
              
              
              616,562Total
      Oil Segment
              
              $
              10,202,881
              
              
              $
              12,835,553Travel
      Plaza Segment:Fuels
              
              $
              48,652,531
              
              
              $
              -Non-Fuels
              
              
              8,137,958
              
              
              
              -Total
      Travel Plaza Segment
              
              $
              56,790,489
              
              
              $
              -Total
      revenues
              
              $
              66,993,371
              
              
              $
              12,835,553Depreciation &
      amortizationOil
      Segment
              
              $
              242,208
              
              
              $
              171,337Travel
      Plaza Segment
              
              
              316,038
              
              
              
              -Total
      depreciation and amortization
              
              $
              558,247
              
              
              $
              171,337Interest
      ExpenseOil
      Segment
              
              $
              218,978
              
              
              $
              178,421Travel
      Plaza Segment
              
              
              217,154
              
              
              
              -Total
      interest expense
              
              $
              436,133
              
              
              $
              178,421Segment
      LossOil
      Segment
              
              $
              (2,236,089
              )
              
              $
              (2,179,875
              )Travel
      Plaza Segment
              
              
              (2,073,816
              )
              
              
              -Total
      segment loss
              
              $
              (4,309,905
              )
              
              $
              (2,179,875
              )
  September
      30
              
              
              June
      302007
              
              
              2007InventoriesOil
      Segment:#2
      heating oil
              
              $
              272,735
              
              
              $
              327,757Diesel
      fuel
              
              
              43,083
              
              
              
              59,086Kerosene
              
              
              18,301
              
              
              
              10,176Propane
              
              
              64,472
              
              
              
              15,980Parts,
      supplies and equipment
              
              
              213,412
              
              
              
              213,484Total
      Oil Segment
              
              $
              612,003
              
              
              $
              626,483Travel
      Plaza Segment:Fuels
              
              $
              1,199,094
              
              
              $
              1,260,653Non-fuel
              
              
              2,294,215
              
              
              
              2,304,654Total
      Travel Plaza Segment
              
              
              3,493,309
              
              
              
              3,565,307Inventory
              
              $
              4,105,312
              
              
              $
              4,191,790GoodwillOil
      Segment
              
              $
              -
              
              
              $
              -Travel
      Plaza Segment
              
              
              11,046,179
              
              
              
              11,139,542Total
      goodwill
              
              $
              11,046,179
              
              
              $
              11,139,542All Other
      AssetsOil
      Segment
              
              $
              11,565,516
              
              
              $
              11,176,463Travel
      Plaza Segment
              
              
              22,176,737
              
              
              
              21,654,301Total
      all other assets
              
              $
              33,742,253
              
              
              $
              32,830,764Total
      AssetsOil
      Segment
              
              $
              12,177,519
              
              
              $
              11,802,946Travel
      Plaza Segment
              
              
              36,716,224
              
              
              
              36,359,150Total
      assets
              
              $
              48,893,744
              
              
              $
              48,162,096


20




The
Company did not have any operations outside the United States of
America.  Accordingly, all revenues were generated from domestic
transactions, and the Company has no long-lived assets outside the United States
of America.  The Company has recorded a deferred income tax liability
at September 30, 2007 of $76,000 pertaining to the temporary difference in
amortization of goodwill and intangibles for book and tax purposes





Note
18 - Subsequent Events





Line of
Credit





On
December 28, 2007 and February 11, 2008 the Company received over advances in
the amount of $250,000 on both dates on its line of credit with Entrepreneur
Growth Capital, LLC. Terms on the over advance were thirty days
each.





Credit Card Receivable
Financing





The
Company has similar credit card financing agreements for the Oil Segment and the
Travel Plaza Segment as discussed in Note 10 of the financials and explained
below respectively





On
November 7, 2007, January 18, 2008, February 14, 2008, April 11, 2008 ,August
14, 2008 and November 5, 2008, the Oil Segment of the Company and its
subsidiary, PriceEnergy.com, refinanced their loans with Credit Cash, in the
amounts of $1,100,000, $500,000, $500,000, $800,000 ,$500,000 and $250,000,
respectively. The outstanding Credit Cash loans to the Oil Segment of the
Company as of September 30, 2008, were $522,999.





Prior to
the business combination between Properties and the Company, Properties entered
into a loan agreement with Credit Cash, which was an advance against credit card
receivables at the truck stop plazas then operated by Properties.  As
a result of the business combination, this obligation was assumed by the
Company’s newly formed, wholly-owned subsidiary, Plazas as it became the
operator of the truck stop plazas. Credit Cash, while acknowledging the business
combination, has continued to obligate both Properties and Plazas in their loan
documents as obligors of the loan. On July 16, 2007, Credit Cash agreed to
extend further credit of $400,000 secured by the credit card receivables at the
travel plazas operated by Plazas. This July 16, 2007 extension of credit
agreement was in addition to and supplemented all previous agreements with
Credit Cash. Terms of the original loan and extensions called for repayment of
$1,010,933 plus accrued interest which will be repaid through Credit Cash
withholding 15% of credit card collections from the operations of the travel
plazas until the loan balance is paid in full. The interest rate is prime plus
3.75% (12% at September 30, 2007). There are certain provisions in the agreement
which allows Credit Cash to increase the withholding, if the amount it is
withholding is not sufficient to satisfy the loan in a timely manner. On
November 2, 2007, January 18, 2008 and again on August 14, 2008, Credit Cash
again agreed to extend an additional credit on the travel plaza receivables in
the amount of $1,100,000, $600,000 and $900,000, respectively. Terms of the
agreement are the same as the prior July 16, 2007 financing except the current
repayment percentage is 12%.  The outstanding balance of this loan for
the Travel Plaza Segment as of September 30, 2008 was $784,954





Related Party
Transactions





Subsequent
to September 30, 2007, related party receivables from Properties were reduced by
approximately $1.8 million.  This reduction occurred from offsets of
rent owed to Properties by the Company’s wholly-owned subsidiary, Plazas, in
connection with its leasing of the real property underlying the travel plazas
operated from October 2007 through June 2008 in the amount of approximately $0.5
million, and from cash payments made by Properties in the amount of $1.3 million
resulting from refinancing and settlements by Properties in December, 2007,
January, 2008 and March, 2008.





From June
1, 2007 through June 30, 2007, during the post-closing period of the business
combination between the Company and Properties, Plazas made $8,374,496 in
payments to its fuel supplier, TransMontaigne, on behalf of
Properties.  These payments were not made from any capital infusion or
advances made by Plazas, but rather were generated from revenues from the
ongoing operations of the Travel Plaza Segment. These payments were included in
the advances to related parties balance of $8,374,496 at September 30, 2007 and
June 30, 2007. On October 5, 2007, Plazas along with Properties entered into an
agreement with TransMontaigne to provide for the continued supply of fuel for
the travel plazas, to extend a credit facility of $2.0 million to Plazas to
purchase fuel on a pre-paid basis and for Properties to provide certain real
property as collateral for its outstanding obligation to TransMontaigne for its
fuel purchases prior to the closing of the business combination. As a result of
this agreement, certain outstanding trade payables owed by Plazas to
TransMontaigne for fuel purchased after the closing of the business combination,
as well as payments made by Plazas during that time period for obligations to
TransMontaigne owed by Properties for fuel purchases prior to the closing, were
reclassified as obligations of Properties. This reclassification correspondingly
reduced Plazas obligations to TransMontaigne by the amount of the payments it
had made to TransMontaigne during the period from June 1, 2007 through June 30,
2007 on behalf of Properties referred to above. Thereafter, on November 30,
2007, the parties amended their agreement and entered into an Amended and
Restated Note Agreement (the “Agreement”), which reduced Plazas’ line of credit
for the purchase of fuel on a cash delivery basis to $1,550,000. This reduced
line of credit was evidenced by a promissory note (the “Note”) in that amount.
The Note does not accrue interest until November 15, 2009 at




21




which
point, if the Note is not paid, it accrues interest at 8% per annum. In addition
to Plazas’ obligation to TransMontaigne pursuant to the Note, as of November 30,
2007, Plazas owed TransMontaigne the sum of $1.6 million in trade payables for
additional fuel it purchased from TransMontaigne after the closing of the
business combination. Any payment of these trade payables will correspondingly
reduce Properties obligations to TransMontaigne under the Agreement. As part of
the Agreement, Properties also made a note to TransMontaigne in an amount, which
in accordance with the reclassification, included the payments made by Plazas to
TransMontaigne on behalf of Properties during the post-closing transition
period. Collateral for the Note and Properties’ obligations to TransMontaigne
under the Agreement are certain real property owned by Properties. The Company
and Properties are currently in the process of renegotiating the terms of the
Agreement.





Fuel
Financing





On
October 17, 2007, the Company entered into a loan agreement with S&S NY
Holdings, Inc. (“S&S”) for $500,000 to purchase #2 heating fuel. The term of
the agreement is for 90 days with an option to refinance at the end of the 90
day period for an additional 90 days. The repayment of the principal amount will
be $0.10 cents per gallon of fuel sold to the Company’s customers excluding
pre-purchase gallons. An additional $0.075 per gallon will be paid as interest.
The agreement also provides that in each 30 day period the interest amount can
be no less than $37,500.00.  As of January 17, 2008, the Company had
repaid $100,000 and exercised its right to refinance the amount until March 31,
2008.  The Company has provided for repayment of this loan in exchange
for granting S&S a 49% interest in Able Energy NY, Inc., a wholly owned
subsidiary of the Company, and a 90% interest in the Company’s Easton and
Horsham, PA operations ("Able PA"). Thereafter, on October 31, 2008, the Company
was granted the right to repurchase S&S's interests in Able NY and
Able PA.  See, “S&S Settlement Agreement” and "Amendment to
the S&S Settlement Agreement", below.





On
October 5, 2007, Properties reclassified all outstanding trade payables with
TransMontaigne to a note payable in the amount of $15.0
million.  Interest at the rate of 8% is being accrued on all past due
amounts as of October 5, 2007.  In addition, an amount of
$1,550,000.00 was added to the note to begin a prepaid purchase program whereby
Plazas will prepay for its fuel prior to delivery.  Repayment of this
note is to commence on or about March 15, 2008 with a 25-year amortization
schedule with a maturity of November 15, 2009. If a threshold payment is made on
or before March 15, 2008 and before August 15, 2008 (after initial 25-year
amortization begins) in the amount of $3.0 million then a new 25-year
amortization schedule will commence effective July 31, 2009 and mature on March
31, 2011.  Collateral on this note are certain properties owned by
Properties. The Company is currently in the process of renegotiating the terms
of this agreement.





On
December 20, 2007, the Company entered in to a second loan agreement with
S&S for $500,000 to purchase #2 heating fuel.  The term of the
agreement is through March 31, 2008.  The repayment of principle is
not due until the maturity date.  An additional $0.075 per gallon will
be paid as interest. The agreement also provides that in each 30-day period the
interest amount can be no less than $37,500.  The Company has also
provided for repayment of this loan in exchange for granting S&S a 49%
interest in Able Energy NY, Inc., a wholly owned subsidiary of the Company, and
a 90% interest in the Company’s Easton and Horsham, PA operations ("Able PA").
Thereafter, on October 31, 2008, the Company was granted the right to
repurchase S&S's interests in Able NY and Able PA.  See,
“S&S Settlement Agreement” and "Amendment to the S&S Settlement
Agreement", below.





On
February 25, 2008, the Company increased an existing credit line by executing a
Fuel Purchase Loan (“FPL”) agreement with EGC.  The increase, in the
amount of $0.5 million, is a further extension of credit under an existing May
13, 2005 agreement between the Company and EGC (the “Loan Agreement”) (See Note
11).  In addition to the general terms of the Loan Agreement, under
the repayment terms of the FPL, EGC will reduce the loan amount outstanding by
applying specific amounts from the Company’s availability under the Loan
Agreement.  These amounts start at $2,500 per business day, commencing
March 1, 2008, gradually increasing to $10,000 per business day on June 1, 2008
and thereafter until the FPL is paid in full.  In further
consideration for making the FPL, commencing February 22, 2008, EGC shall be
entitled to receive a revenue share of four cents ($0.04) per gallon of fuel
purchased with the FPL funds, subject to a $5,000 per week minimum during the
first seven weeks of the program.





On May 8,
2008, Plazas entered into a Fuel Supply Agreement (“FSA”) with Atlantis
Petroleum, LLC (“Atlantis”).  The FSA provides that for a term of
three years, Atlantis will be the sole and exclusive diesel fuel supplier to
eight (8) of the travel plazas operated by Plazas located in Pennsylvania. The
price per gallon of the diesel fuel supplied by Atlantis provides Plazas with a
favorable wholesale rate. The price per gallon is based upon the delivery of a
full transport truckload of product. All prices charged by Atlantis are subject
to the provisions of applicable law. It is estimated that pursuant to the FSA,
Atlantis will supply at least 44,000,000 gallons of diesel fuel for the first
year and increase thereafter as Plazas increases its market share.





The
obligations of Plaza under the FSA have been guaranteed by Properties, which
guaranty is limited to a thirty day period beginning thirty days prior to
Atlantis’ written notice to Properties of Plazas’ breach of the
FSA.





On
October 31, 2008, Plazas entered into agreements with UCP Capital Management,
LLC (“UCP”) pursuant to which UCP will arrange for the consignment and
distribution of gasoline obtained from Gulf Oil or Valero Oil terminals and
motor diesel fuel at the travel plazas operated by Plazas. Once delivered,
Plazas will have complete control over the product delivered including the
retail prices at which the gasoline is sold. UCP will retain the cost of the
fuel as determined by the Gulf or Valero Branded Rack price for the gasoline or
its cost of the diesel fuel plus two cents plus all applicable taxes and
delivery charges per gallon for each gallon of gasoline delivered by UCP and
sold by Plazas in a given month. Plazas will retain the difference between the
amount retained by UCP and the price per gallon of gasoline or diesel fuel sold.
Pursuant to this agreement the gasoline islands at the travel plazas operated by
Plazas will be branded with either the Gulf or Valero trade name. The term of
the agreements shall be effective on November 1, 2008 and run through October
31, 2013.





22


Litigation





On
October 10, 2007, the Company entered into a Stipulation settling the action it
had commenced against Mark Roy Anderson, Camden Holdings, Inc., Summit Oil and
Gas, Inc., Summit Ventures, Inc., Harvest Worldwide, LLC and Harvest Worldwide,
Inc. in the Superior Court of California for the County of Los Angeles, Case No.
BC363149, as well as the counterclaims asserted therein by Summit Ventures, Inc.
and Mark Anderson against the Company and certain of its present and former
directors and officers, Gregory Frost, Tim Harrington, Christopher Westad,
Timothy Harrington and Frank Nocito. The Stipulation provides that in
consideration of the parties discontinuing with prejudice all their claims
against each other, Summit Ventures, Inc. will return its stock certificate
evidencing its ownership of 142,857 shares of the Company’s common stock and
upon such return it will be issued a new certificate for such shares free of any
restrictive legend. Upon execution of the Stipulation of Settlement the parties
exchanged general releases of all claims they had or may have had against each
other to the date of the releases.





On
October 1, 2007, the Company and its Chief Executive Officer (“CEO”) filed an
action in New York state court against Marcum & Kliegman, LLP (the Company’s
former auditors) and several of its partners for numerous claims, including
breach of contract, gross negligence and defamation.  The Company and
its CEO are seeking compensatory damages in the amount of at least $1 million
and punitive damages of at least $20 million. The claims asserted by the Company
and its CEO arise out of Marcum & Kliegman’s conduct with respect to the
preparation and filing of the Company’s SEC Reports.  On November 26,
2007, Marcum & Kliegman and its partners filed a motion to dismiss the
complaint on the ground that it fails to state a claim for relief as a matter of
law.  On May 5, 2008, the Court issued a written decision and order
sustaining the Company’s claims against Marcum & Kliegman for breach of
contract and defamation, but dismissed the Company’s claims for negligence,
gross negligence, breach of fiduciary duty and breach of covenant of good faith
and fair dealing against Marcum & Kliegman and the defamation claim against
the individual defendants.  Both the Company and Marcum & Kliegman
have filed appeals from the decision and order.  Discovery proceedings
have commenced and the Company intends to vigorously prosecute this
action.





On
January 7, 2008, the Company, its Chief Executive Officer, Gregory D. Frost, and
its Vice-President of Business Development, Frank Nocito, were served with a
summons and complaint in a purported class action complaint filed in the United
States District Court, District of New Jersey. This action, which seeks class
certification, was brought by shareholders of CCI Group, Inc. (“CCIG”). The
complaint relates to a Share Exchange Agreement (the “Share Exchange
Agreement”), dated July 7, 2006, between Properties and CCIG, pursuant to which
seventy percent (70%) of the outstanding and issued shares of CCIG were
exchanged for 618,557 shares of the Company’s common stock which were owned by
Properties of which 250,378 shares were to be distributed to the shareholders of
CCIG and the balance of the shares were to be used to pay debts of
CCIG.  Neither the Company nor Messrs. Frost or Nocito were parties to
the Share Exchange Agreement. Properties remain the largest shareholder of the
Company. The Share Exchange Agreement was previously disclosed by the Company in
its Current Report on Form 8-K filed with the SEC on July 7, 2006 as part of a
disclosure of a loan by the Company to Properties.





Each of
the Company and Messrs. Frost and Nocito believes it/he has defenses against the
alleged claims and intends to vigorously defend itself/himself against this
action and have filed a motion to dismiss the compliant.  The motion
has been fully briefed and submitted to the Court.  As of the date of
this Report, no decision has been issued with respect to the
motion.





On
September 17, 2008 an action was commenced in the Common Court of Pleas in
Northumberland County, Pennsylvania against Plazas by SCC3, LLC. The action
arises out of a note (the “Note”) made by Milton Properties, Inc. (“Milton”),
the owner of the real property (the “Property”) underlying the Milton travel
plaza which is leased to, and operated by, Plazas, to Silar Special
Opportunities Fund, L.P.(“Silar”) and a mortgage (the “Mortgage”) granted by
Milton to Silar on the Property to secure the Note. Silar subsequently assigned
the Note and Mortgage to the plaintiff, SCC3, LLC.  As further
security for Milton’s obligations under the Note, Milton assigned to Silar its
lease with Plazas for the Property and the rents therefor (the “Assignment of
Leases and Rent”). The lease (the “Lease”) for the property expires in
2013.  Silar also assigned its rights under the Assignment of Leases
and Rents to the plaintiff.  The complaint alleges that Milton is in
default of its obligations under the Note and Mortgage. As a result, plaintiff
alleges that it has exercised its rights under the Assignment of Lease and Rents
and revoked Milton’s right to collect rent for the Property. The plaintiff
further alleges that Plazas is in default of its obligations under the Lease and
that pursuant to the Assignment of Lease and Rents plaintiff has the right to
enforce the Lease and declare all rent for the remainder of the term of the
Lease to be due and payable. Plaintiff is seeking damages in the amount of
$17,855,024 representing the balance of rent due under the term of the
Lease.  Plazas has filed an answer denying the allegations of the
complaint. Plazas intends to make vigorously defend this action and will make a
motion to dismiss the complaint.





On
October 7, 2008 a complaint was filed in the United States District Court for
the Western District of Texas by Petro Franchise Systems, LLC and TA Operating
LLC, (collectively the “Plaintiffs”), against Properties, Plazas and The
Chelednik Family Trust (the “Trust”), (collectively the “Defendants”). The
complaint seeks monetary damages and injunctive relief arising out of
Properties’ and Plazas’ alleged breach of Petro franchise agreements for the
Petro travel centers located in Breezewood and Milton, Pennsylvania and the
Trust’s guaranty of the Milton franchise agreement.  Plaintiffs are
seeking damages in the amounts of $149,851 and $154,585 for the alleged breach
of the Breezewood and Milton franchise agreements, respectively. In addition,
the complaint is requesting damages for violations of the Lanham Act, including
the continued purported improper use by Properties and Plazas of the registered
Petro trademarks and the dilution of those trademarks; unfair competition and
unjust enrichment; trademark infringement under Texas state law; and,
conversion. As of the date of this Report, the complaint has not been served
upon the defendants.





23


Engagement of
Consultant





On
January 11, 2008, the Company executed a consulting agreement with Hammond
Associates, LLC to provide consulting services in connection with satisfying the
Company’s SEC reporting requirements.  On April 30, 2008, the Company
issued 14,442 restricted shares of its common stock, $0.001 par value, as
partial consideration for services provided by the consultant.





Sale of Able Melbourne
Assets





On
February 8, 2008 (the "Closing Date"), the Company and Able Melbourne executed
an Asset Purchase Agreement (“APA”) with Able Oil of Brevard, Inc. (“Able
Brevard”), a Florida corporation, owned by a former employee of Able
Melbourne.  For consideration in the amount of $375,000, the APA
provided for the sale to Able Brevard of all of the tangible and intangible
assets (excluding corporate books and records), liabilities and lease
obligations of Able Melbourne, as is, on the Closing Date.




Closure of Strattanville
Travel Plaza





One of
the Travel Plazas Segments facilities, Strattanville, Pennsylvania, was
shut-down in April, 2008 due to unprofitable operations at that
site.  Management is exploring business opportunities relating to this
site.





Doswell Sale
Agreement





On May
12, 2008, the Company entered into a sale agreement with T.S.O, Inc. (“TSO”) for
the sale of the Company’s assets located at its leased Doswell, VA travel
plaza.  In exchange for total consideration to the Company of
approximately $0.4 million, the Company has agreed to transfer to TSO title to
all tangible and intangible assets (excluding corporate records) and liabilities
relating to the operations of the Doswell, VA travel plaza.  TSO has
until October 12, 2008 to obtain and deliver a firm commitment letter for the
purchase price.  During the period July 12, 2008 through the closing
of the purchase, TSO is obligated to pay the Company rent in the amount of
$75,000 per month. By letter dated November 6, 2008, the owner of the real
property underlying the Doswell Travel Plaza sent a notice to TSO terminating
the contract of sale.





Lease of Newton
Facility





On July
14, 2008, the Company executed a triple net lease agreement with North Jersey
Oil, Inc. (North Jersey) for the use of the Company’s idled Newton, NJ fuel
terminal facility. The term of the lease is for thirty years.  Upon
execution, the lease agreement provides for a $250,000 cash payment to the
Company and the receipt of a $250,000 Tenant’s Promissory Note (together, the
“Basic Rent”). The note provides for interest at 8% and twelve monthly
payments.  Payments are to commence on the date that North Jersey
receives all of the necessary permits to conduct its operations at the Newton
site.  If within six months of the execution date of the lease
agreement North Jersey is unable to secure the necessary operating permits or
during the same time North Jersey is advised that its applications for the
necessary operating permits have been denied, the Company will be obligated to
return the Basic Rent to North Jersey and terminate the lease
agreement.  The lease agreement also provides both the Company and
North Jersey with storage and throughput rights at their respective terminals at
a cost to the user of $0.05 per gallon.  In addition, North Jersey is
obligated to provide the Company with an initial six-month, $0.5 million fuel
purchase credit facility at a cost to the Company of $0.02 per gallon
financed.  The lease agreement also provides North Jersey with a $1.00
purchase option which North Jersey can exercise upon payment in full, in cash,
of all the Basic Rent





S&S Settlement
Agreement





Effective
July 22, 2008, the Company and S&S NY Holdings, Inc (“S&S) executed a
settlement agreement.  In exchange for total consideration of
approximately $1.0 million, consisting of principal and interest due S&S,
S&S assumption of a specific liability and the purchase of existing
inventory, the Company transferred to S&S 49% of the common stock of its
subsidiary, Able NY, and 90% of its interest in its Easton and Horsham, PA
operations.   Under specific situations, the Company’s filing for
bankruptcy or default on payment of specific debt, S&S has a call option on
the remaining 51% of Able NY for an additional $1.0 million and other valuable
consideration.  For a period of one year from the execution of the
settlement agreement, S&S has an option to purchase the remaining 10% of
Easton and Horsham operations for $50,000 and other valuable
consideration.  Able NY has also entered into a consulting agreement
with S&S under which S&S will be paid five percent of Able NY’s gross
profit for its management services provided to Able NY.





The
Company has a ninety-day buy-out option expiring on October 20, 2008, under
which the Company can reacquire the above noted interests in Able NY and Easton
and Horsham operations for the sum of $1.1 million.





24





PriceEnergy.com,
Inc.





On
September 22, 2008, the Company was granted additional shares of common stock of
its majority owned subsidiary, Price Energy.com, Inc., in exchange for
satisfaction of $3.8 million of debt owed to the Company, increasing its
ownership interest in Price Energy to 92%.





Change in
Officers





On
October 22, 2008, Louis Aponte was appointed as President of the Company’s home
heating oil subsidiaries. Mr. Aponte will be responsible for the daily
operations of Able’s home heating business, as well as the operation of Able’s
Rockaway Terminal. Mr. Aponte is taking the place of Christopher Westad who will
remain with the Company working in its New York offices in charge of special
projects for the Company.





Amendment To the S&S
Settlement Agreement





On
October 31, 2008, the Company and S&S NY Holdings, Inc. entered into an
agreement amending (the “Amendment”) the Settlement Agreement. The Amendment
provides that the Company has the right to repurchase S&S’s interest in Able
PA for the sum of $548,909.75 payable $250,000 upon the signing of the Amendment
and the balance ten business days thereafter. In the event that the balance is
not paid within the time period specified, S&S shall retain the initial
payment of $250,000 and its interest in Able PA.  The Amendment
further provides that the Company may repurchase S&S’s 49% interest in Able
NY for the sum of $550,000 payable $150,000 within thirty days after the
repurchase of Able Pa; commencing thirty days after such payment, eight (8)
equal monthly installments each in the amount of $30,000; and the balance of
$160,000 to be made thirty days after the final monthly installment is paid.
S&S shall retain its interest in Able NY as security for such payments.
However, as long as Able is not in default of such payments, S&S shall have
no rights whatsoever with respect to its shares of stock in Able NY, including,
but not limited to any distribution of any revenues, profits or net profits of
Able NY.  In the event that Able defaults in making such payments and
fails to timely cure such default, S&S shall retain full ownership with all
attendant shareholder rights thereto of its shares of stock in Able NY,
provided, however, S&S’s ownership percentage of Able NY will be reduced by
the percentage of payments made to Able NY prior to the default as applied to
the total purchase price for S&S’s interest in Able NY. The Amendment also
cancelled the Consulting Agreement which was to be entered into pursuant to the
terms of the Settlement Agreement between Able NY and S&S in exchange for a
payment of $60,000 to be made at the time the final payment is due for payment
of the Able NY shares.





Sublease of Travel
Plazas





Effective November
1, 2008, All American Plazas, Inc. subleased the operation of the Carlisle
Gables, Harrisburg and Frystown Gables plazas to independent third parties each
for a term of three years. Plazas determined the sublease of these facilities
would cut its costs, but Plazas also maintained the right to supply the fuel to
these plazas on a cost plus basis, which it believes, will result in a net
profit to the Company. Each of the subleases provides for the purchase of the
existing inventory and the Frystown Gables sublease provides for a three month
abatement of rent.





25


ITEM
2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.





Statements
in this Quarterly Report on Form 10-Q concerning the Company's outlook or future
economic performance, anticipated profitability, gross billings, expenses or
other financial items, and statements concerning assumptions made or exceptions
to any future events, conditions, performance or other matters are "forward
looking statements," as that term is defined under the Federal Securities Laws.
Forward-looking statements are subject to risks, uncertainties, and other
factors that would cause actual results to differ materially from those stated
in such statements. Such risks, and uncertainties and factors include, but
are not limited to: (i) changes in external competitive market factors or trends
in the Company's results of operation; (ii) unanticipated working capital or
other cash requirements and (iii) changes in the Company's business
strategy or an inability to execute its competitive factors that may prevent the
Company from competing successfully in the marketplace.





OVERVIEW





Able
Energy, Inc. (“Able”) was incorporated on March 13, 1997, in the state of
Delaware. Its current wholly-owned subsidiaries are Able Oil Company Inc. (“Able
Oil”), Able Energy New York, Inc. (“Able NY”), Able Oil Melbourne, Inc.
(inactive, as of February 8, 2008), (“Able Melbourne”), Able Energy Terminal
LLC, PriceEnergy.com Franchising LLC (inactive), Able Propane, LLC (inactive),
and its majority owned (67.3%) subsidiary, PriceEnergy.com, Inc. (“PriceEnergy”)
and All American Plazas, Inc. (“Plazas”).  Able, together with its
operating subsidiaries, are hereby also referred to as the Company.





Since the
Company’s business combination with All American Plazas, Inc. now known as All
American Properties, Inc. (“Properties”) on May 30, 2007, the Company is engaged
in two primary business activities, organized in two Segments; the Oil Segment
and the Travel Plaza Segment.





The
Company’s Oil Segment, consisting of Able Oil, Able NY, Able Melbourne, Able
Energy Terminal, LLC and PriceEnergy, is engaged in the retail distribution of,
and the provision of services relating to, #2 home heating oil, propane gas,
kerosene and diesel fuels. In addition to selling liquid energy products, the
Company offers complete heating, ventilation and air conditioning (“HVAC”)
installation and repair and other services and also markets other petroleum
products to commercial customers, including on-road and off-road diesel fuel,
gasoline and lubricants.  Please refer to Note 18 - Subsequent Events,
for disclosure relating to the February 8, 2008 sale of the Able Melbourne
assets and liabilities; and the July 22, 2008 sale of 49% of the common stock of
Able NY and the Company’s Easton and Horsham, Pennsylvania operations (“Able
PA”) and the subsequent rights granted to the Company on October 31, 2008 to
repurchase those shares of stock in Able NY and the interest in Able
PA.




The
Company’s Travel Plaza Segment, operated by Plazas, is engaged in the retail
sale of food, merchandise, fuel, personal services, onsite and mobile vehicle
repair, services and maintenance to both the professional and leisure driver
through a current network of ten travel plazas, located in Pennsylvania, New
Jersey, New York and Virginia.




Management's
Discussion and Analysis of Financial Condition and Results of Operation contain
forward-looking statements, which are based upon current expectations and
involve a number of risks and uncertainties. In order for us to utilize the
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995, investors are hereby cautioned that these statements may be affected by
the important factors, among others, set forth below, and consequently, actual
operations and results may differ materially from those expressed in these
forward-looking statements. The important factors include:





§
            Commodity
      Supply





§
            Commodity
      Pricing





§
            Customers
      Converting to Natural Gas





§
            Alternative
      Energy Sources





§
            Winter
      Temperature Variations (Degree
Days)





§
            Customers
      Moving Out of The Area





§
            Legislative
      Changes





§
            The
      Availability (Or Lack of) Acquisition
Candidates





§
            The
      Success of Our Risk Management
Activities




26




§
            The
      Effects of Competition





§
            Changes
      in Environmental Law





§
            General
      Economic, Market, or Business
Conditions





We
undertake no obligation to update or revise any such forward-looking
statements.





CRITICAL
ACCOUNTING POLICIES





Critical
Accounting Policies and Estimates





Our
significant accounting policies are described in Note 3 of the condensed
consolidated financial statements included in this Quarterly Report on Form 10-Q
for the quarter ended September 30, 2007.  The condensed consolidated
financial statements are prepared in accordance with United States generally
accepted accounting principles which require management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period.  Actual results could differ from those
estimates.





We
consider the following policies to be the most critical in understanding the
judgments involved in preparing the consolidated financial statements and the
uncertainties that could impact our results of consolidated operations,
financial condition and cash flows.





Revenue
Recognition, Unearned Revenue and Customer Pre-Purchase Payments





Sales of
travel plaza services, fuel and heating equipment are recognized at the time of
delivery to the customer, and sales of equipment are recognized at the time of
installation. Revenue from repairs and maintenance service is recognized upon
completion of the service. Payments received from customers for heating
equipment service contracts are deferred and amortized into income over the term
of the respective service contracts, on a straight-line basis, which generally
do not exceed one year.  Payments received from customers for the
pre-purchase of fuel are recorded as a current liability until the fuel is
delivered to the customer, at which time the payments are recognized as revenue
by the Company.





Depreciation,
Amortization and Impairment of Long-Lived Assets





We
calculate our depreciation and amortization based on estimated useful lives and
salvage values of our assets. When assets are put into service, we make
estimates with respect to useful lives that we believe are reasonable. However,
subsequent events could cause us to change our estimates, thus impacting the
future calculation of depreciation and amortization.




Additionally,
we assess our long-lived assets for possible impairment whenever events or
changes in circumstances indicate that the carrying value of the assets may not
be recoverable. Such indicators include changes in our business plans, a change
in the extent or manner in which a long-lived asset is being used or in its
physical condition, or a current expectation that, more likely than not, a
long-lived asset that will be sold or otherwise disposed of significantly before
the end of its previously estimated useful life. If the carrying value of an
asset exceeds the future undiscounted cash flows expected from the asset, an
impairment charge would be recorded for the excess of the carrying value of the
asset over its fair value. Determination as to whether and how much an asset is
impaired would necessarily involve numerous management estimates. Any impairment
reviews and calculations would be based on assumptions that are consistent with
our business plans and long-term investment decisions.





Allowance
for Doubtful Accounts





We
routinely review our receivable balances to identify past due amounts and
analyze the reasons such amounts have not been collected. In many instances,
such uncollected amounts involve billing delays and discrepancies or disputes as
to the appropriate price or volumes of oil delivered, received or exchanged. We
also attempt to monitor changes in the creditworthiness of our customers as a
result of developments related to each customer, the industry as a whole and the
general economy. Based on these analyses, we have established an allowance for
doubtful accounts that we consider to be adequate, however, there is no
assurance that actual amounts will not vary significantly from estimated
amounts.




Income
Taxes





As part
of the process of preparing consolidated financial statements, the Company is
required to estimate income taxes in each of the jurisdictions in which it
operates. Significant judgment is required in determining the income tax expense
provision. The Company recognizes deferred tax assets and liabilities based on
differences between the financial reporting and tax bases of assets and
liabilities using the enacted tax rates and laws that are expected to be in
effect when the differences are expected to be recovered. The Company assesses
the likelihood of our deferred tax assets being recovered from future taxable
income. The Company then provides a valuation allowance for deferred tax assets
when the Company does not consider realization of such assets to be more likely
than not. The Company considers future taxable income and ongoing prudent and
feasible tax planning strategies in assessing the valuation allowance. Any
decrease in the valuation allowance could have a material impact on net income
in the quarter in which such determination is made.




27


RECENT
ACCOUNTING PRONOUNCEMENTS





In July
2006, the Financial Accounting Standards Board (“FASB”) issued FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes - an
interpretation of FASB Statement No. 109" ("FIN 48"), which clarifies the
accounting for uncertainty in tax positions. This interpretation requires that
the Company recognize in its consolidated financial statements, the impact of a
tax position, if that position is more likely than not of being sustained on
audit, based on the technical merits of the position. The provisions of FIN 48
are effective as of July 1, 2007, with the cumulative effect of the change in
accounting principle recorded as an adjustment to opening retained earnings. The
application of this statement has not had a material impact on the Company’s
consolidated financial statements.




In
September 2006, the FASB issued SFAS No.157, "Fair Value Measurements", which
defines fair value, establishes a framework for measuring fair value in United
States generally accepted accounting principles and expands disclosures about
fair value measurements. Adoption is required for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. Early adoption
of SFAS 157 is encouraged. The Company is currently evaluating the impact of
SFAS 157, and the Company will adopt SFAS 157 in the fiscal year beginning
July 1, 2008.




In
September 2006, the staff of the SEC issued Staff Accounting Bulletin ("SAB")
No. 108, which provides interpretive guidance on how the effects of the
carryover or reversal of prior year misstatements should be considered in
quantifying a current year misstatement. SAB 108 became effective in fiscal
2007. Adoption of SAB 108 did not have a material impact on the Company's
consolidated financial position, results of operations or cash
flows.




In
September 2006, the FASB issued SFAS No. 158, “Employers Accounting for Defined
Pension and Other Postretirement Plans-an amendment of FASB No.’s 87, 88, 106
and 132(R).”  SFAS 158 requires an employer and sponsors of one or
more single employer defined plans to recognize the funded status of a benefit
plan; recognize as a component of other comprehensive income, net of tax, the
gain or losses and prior service costs or credits that may arise during the
period; measure defined benefit plan assets and obligations as of the employer’s
fiscal year; and enhance footnote disclosure.  For fiscal years ending
after December 15, 2006, employers with equity securities that trade on a public
market are required to initially recognize the funded status of a defined
benefit postretirement plan and to provide the enhanced footnote
disclosures.  For fiscal years ending after December 15, 2008,
employers are required to measure plan assets and benefit
obligations.  Management of the Company is currently evaluating the
impact of adopting this pronouncement on the consolidated financial
statements.




In
December 2006, the FASB issued FASB Staff Position ("FSP") EITF 00-19-2
"Accounting for Registration Payment Arrangements" ("FSP EITF 00-19-2") which
specifies that the contingent obligation to make future payments or otherwise
transfer consideration under a registration payment arrangement should be
separately recognized and measured in accordance with SFAS No. 5, "Accounting
for Contingencies." Adoption of FSP EITF 00-19-02 was required for fiscal years
beginning after December 15, 2006, and has not had a material impact on the
Company's consolidated financial position, results of operations or cash
flows.




In
February 2007, the FASB issued SFAS No. 159 "The Fair Value Option for Financial
Assets and Financial Liabilities-Including an amendment of FASB Statement No.
115", which permits entities to choose to measure many financial instruments and
certain other items at fair value. The fair value option established by this
Statement permits all entities to choose to measure eligible items at fair value
at specified election dates. A business entity shall report unrealized gains and
losses on items for which the fair value option has been elected in earnings at
each subsequent reporting date. Adoption is required for fiscal years beginning
after November 15, 2007. Early adoption is permitted as of the beginning of a
fiscal year that begins on or before November 15, 2007, provided the entity also
elects to apply the provisions of SFAS Statement No. 157, Fair Value
Measurements. The application of this statement has not had a material impact on
the Company’s consolidated financial statements.




In
December 2007, the FASB issued SFAS No. 160 “Noncontrolling Interests in
Consolidated Financial Statements–an amendment of ARB No. 51.”  SFAS
160 establishes accounting and reporting standards pertaining to ownership
interests in subsidiaries held by parties other than the parent, the amount of
net income attributable to the parent and to the noncontrolling interest,
changes in a parent’s ownership interest, and the valuation of any retained
noncontrolling equity investment when a subsidiary is
deconsolidated.  This statement also establishes disclosure
requirements that clearly identify and distinguish between the interests of
the parent and the interests of the noncontrolling owners.  SFAS 160
is effective for fiscal years beginning on or after December 15,
2008.  The Company is in the process of evaluating the effect that the
adoption of SFAS 160 will have on its consolidated results of operations,
financial position and cash flows.




28




In
December 2007, the FASB issued SFAS No. 141 (revised 2007), “Business
Combinations” (SFAS 141R).  SFAS 141R establishes principles and
requirements for how an acquirer recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, any
noncontrolling interest in the acquiree and the goodwill
acquired.  SFAS 141R also establishes disclosure requirements to
enable the evaluation of the nature and financial effects of the business
combination.  SFAS 141R is effective for financial statements issued
for fiscal years beginning after December 15, 2008.   The Company
is currently evaluating the potential impact of adoption of SFAS 141R on its
consolidated financial statements.




In March
2008, the FASB issued SFAS No. 161 “Disclosures about Derivative Instruments and
Hedging Activities”.  The new standard is intended to improve
financial reporting about derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity’s financial statements issued for fiscal years and interim
periods beginning after November 15, 2008, with early adoption
encouraged.  The Company is currently evaluating the impact of
adopting SFAS No. 161 on its consolidated financial statements.




In May
2008, the FASB issued SFAS No. 162 “The Hierarchy of Generally Accepted
Accounting Principles”.  The new standard identifies the sources of
accounting principles and the framework for selecting the principles to be used
in the preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States (the GAAP hierarchy).  SFAS No. 162 will become
effective 60 days following the SEC’s approval of the Public Company Accounting
Oversight Board amendments to AU Section 411, The Meaning of Present Fairly
in Conformity With Generally Accepted Accounting Principles.  Adoption
of SFAS No. 162, upon its effectiveness, is not expected to have a material
impact on the Company's consolidated financial position, results of operations
or cash flows.




RESULTS
OF OPERATIONS





Three
Months Ended September 30, 2007 Compared To Three Months Ended September 30,
2006





During
the quarter ended September 30, 2007, the Company’s total revenues were $67.0
million.  The $54.2 million increase in revenue was primarily due to
the business combination with All American Plazas, Inc. on May 30, 2007. The
Company is engaged in two primary business activities, organized in two
segments; the Oil Segment and the Travel Plaza Segment.





Oil
Segment





Net sales
for the quarter ended September 30, 2007 were $10.2 million versus $12.8 million
in the same period last year, a decrease of $2.6 million, or 20.3%. The decrease
was attributed to a $1.0 million, or 15.7%, decrease in #2 Heating Oil sales,
due primarily to an increase in the price the Oil Segment paid for the heating
oil and the loss of the Oil Segment contract with the BJ Wholesale Club. The Oil
Segment also had a $1.6 million, or 26.9%, related decrease in other fuel sales
reflecting the loss of some of the Oil Segment’s commercial fuel customers.
While the Oil Segment has initiated efforts to recover and/or replace the lost
commercial fuel customers and its former net sales, there is no assurance that
the Oil Segment will be successful in our efforts.





Gross
profit decreased $0.6 million and gross profit margin percent for the quarter
ended September 30, 2007 decreased to 5.5% from 9.9% last year. The decrease in
gross profit margin percent was the result of increased fuel costs that we were
not able to pass on to our customers.





Selling,
general and administrative expense for the quarter ended September 30, 2007
decreased by $0.4 million, or 16.9%, compared to the same period in the prior
year. This is predominately related to a decrease in our audit and legal fees in
the current three month period.





Total
other expenses decreased to a net expense of $0.7 million in the quarter ended
September 30, 2007 from $0.9 million last year. The change was primarily related
to a $0.4 million decrease in financing costs related to the prior year
amortization of debt discounts on convertible debenture and notes payable, along
with a decrease in other income of $0.2 million





As a
result of the above noted performance for the quarter ended September 30, 2007,
net loss remained flat at $2.2 million.





Travel
Plaza Segment





Net sales
for the quarter ended September 30, 2007 were $56.8 million, reflecting the
Plaza Segment first full quarter of consolidated reporting of the Travel Plaza
Segment, acquired May 30, 2007.





Gross
profit for the period was $2.9 million.





Selling,
general and administrative expense for the quarter ended September 30, 2007 was
approximately $4.6 million.





Total
other income resulted in approximately $51,000.




29


Net loss
of the Travel Plaza Segment was $2.1 million for this three month
period.





No
comparable information for the Travel Plaza Segment exists for the prior fiscal
period ended September 30, 2006 since the transaction with All American Plazas,
Inc., now known as All American Properties, Inc., was not closed during that
period and therefore, the Company was not engaged in the travel plaza business
during that period.





LIQUIDITY
AND CAPITAL RESOURCES





The
quarter ended September 30, 2007 was the first full quarter after the closing of
the Company’s business combination with Properties and the operation of its new
Travel Plaza Segment. During this period the Company spent a substantial amount
of time and effort reviewing the combined Company’s administrative expenses in
an attempt to consolidate and streamline its operations to reduce its overall
expenses and overhead. In particular, the Company focused on eliminating
employee staffing and expenses that were common to both its Oil and Travel Plaza
Segments. The goal was to increase the Company’s liquidity by eliminating
duplicative costs and expenses. The attempt to streamline the operations of the
combined Company and reduce expenses is an ongoing effort and will take some
time to complete. The Company will continue to review its administrative
expenses and consolidate and eliminate where it is thought to be efficient to do
so.





The Oil
Segment had a net loss of $2.2 million for the three month period ended
September 30, 2007 and ended the period with a working capital deficiency of
$6.6 million. The $3.0 million increase in working capital deficiency since
June 30, 2007 is directly related to an increase in customer prepurchase
liability and the partial use of these prepaid dollars to fund operations during
the three month period ending September 30, 2007 which, due to the seasonal
nature of the Oil Segment’s business, is historically that Segment’s least
productive period of the year.  The Oil Segment continued to draw on
its credit line during the quarter.  The Company intends to seek new
financing for its Oil Segment to increase profitability and improve liquidity,
as well as, investigate possible areas into which it may be able to expand its
business.





The
Travel Plaza Segment had a net loss of $2.1 million for the three month period
ended September 30, 2007 and ended the period with a working capital deficiency
of $0.5 million.   The Company addressed the Travel Plaza
Segments liquidity needs by securing additional funds by increasing the amount
of its credit card receivable financing and changes in the terms on its
financing agreement with Crown Financial, LLC.





The
Company overall had a net loss of $4.3 million for the three month period ended
September 30, 2007, and provided cash from operations of $0.8  million
for the three month period ended September 30, 2007.





The
Company overall had a working capital deficiency of $7.1 million at September
30, 2007 compared to a working capital deficiency of $3.6 million at June 30,
2007. The increase in the working capital deficiency of $3.5 million was
primarily due to an increase in the Company’s trade payables and customer
prepurchase liability.





As of
September 30, 2007, the Company had a cash balance of $3.5 million and $1.4
million of available borrowings through its credit line facility, potentially
offset by $4.7 million in obligations for funds received in advance under the
pre-purchase fuel program.





These
factors raise substantial doubt about the Company's ability to continue as a
going concern. These condensed consolidated financial statements do not include
any adjustments relating to the recoverability of the recorded assets or the
classification of the liabilities that may be necessary should the Company be
unable to continue as a going concern.





In
addition, to the consolidation of the Company’s combined business as outlined
above, in a further effort to increase its liquidity, the Company is pursuing
other lines of business, which include expansion of its current commercial
business into other products and services such as solar energy and other energy
related home services. The Company is also evaluating all of its business
segments for cost reductions and efficiency improvements. However, there can be
no assurance that we will be successful in our efforts to enhance our liquidity
situation.





The
Company will also pursue opportunities to procure an overall fuel supply program
that encompasses both operating segments of its business to enable better
profitability for both Segments. The Company also intends to aggressively pursue
potential expansion into new market areas for both Segments.





The
Company will also evaluate within each Segment of operations those areas that
are more productive than others and either restructure, lease, sell or
discontinue selected operations of our businesses until a better use of our
assets is available or economic conditions allow for continued
expansion.





In order
to conserve its capital resources as well as to provide an incentive for the
Company’s employees and other service vendors, the Company will continue to
issue, from time to time, common stock and stock options to compensate employees
and non-employees for services rendered. The Company is also focusing on
its Oil Segment by expanding distribution programs and developing new customer
relationships to increase demand for its products. The Travel Plaza Segment is
looking to reduce costs internally and seek out more attractive fuel purchase
arrangements along with reviewing its pricing philosophy to its
customers.




30


Subsequent
to September 30, 2007, the Company executed numerous financing agreements, sold
certain assets and engaged in other activities to enhance its liquidity (See,
Note 18 to Financial Statements, “Subsequent Events”).





The
Company must also bring current each of its SEC filings as part of a plan to
raise additional capital. In addition to the filing of this Form 10-Q for the
quarter ended September 30, 2007, the Company must also complete and file its
Reports on Form 10-Q for the quarters ended December 31, 2007, March 31, 2008,
September 30, 2008 and its Annual Report on Form 10-K for the year ended June
30, 2008.  Achieving filing compliance is critical to the financial
health of the Company since it will permit the Company to raise funds for equity
investments which would replace debt.  The Company has been working
diligently toward this goal but has been slowed by factors discussed throughout
this Report including a change in its Independent Auditors which has caused the
Company substantial delay in filing its Reports.





The
Company has also been waiting to receive the final report from the SEC with
respect to its Formal Order of Private Investigation. While the Company has no
reason to believe there will be a negative finding by the SEC, until the
issuance of the SEC’s final report, this will continue to have an adverse impact
on the Company’s ability to raise new capital even if the Company achieves
filing compliance





There can
be no assurance that the financing or the cost saving measures or the
anticipated plans of the Company as identified above will be satisfactory in
addressing the short-term liquidity needs of the Company. In the event that
these plans cannot be effectively realized, there can be no assurance that the
Company will be able to continue as a going concern.





Seasonality





The
Company’s Oil Segment operations are subject to seasonal fluctuations, with a
majority of the Oil Segment’s business occurring in the late fall and winter
months. Approximately 60% to 65% of the Oil Segment’s revenues are earned and
received from October through March; most of such revenues are derived from the
sale of home heating products, primarily #2 home heating
oil.  However, the seasonality of the Oil Segment’s business is
offset, in part, by an increase in revenues from the sale of HVAC products and
services, diesel and gasoline fuels during the spring and summer months due to
the increased use of automobiles and construction apparatus.





From May
through September, Able Oil can experience considerable reduction of retail
heating oil sales. Similarly, Able NY’s propane operations can experience up to
an 80% decrease in heating related propane sales during the months of April to
September, which is offset somewhat by increased sales of propane gas used for
pool heating, heating of domestic hot water in homes and fuel for outdoor
cooking equipment.





Seasonal
issues have an insignificant impact on the Company’s Travel Plaza
Segment.  While leisure travel has a tendency to moderate somewhat in
the winter months in the geographic areas in which we operate, revenue related
to the leisure traveler is relatively insignificant compared to fuel and
services related revenue generated by our professional driving
customers.





Future
Operating Results





Future
operating results, which reflect management’s current expectations, may be
impacted by a number of factors that could cause actual results to differ
materially from those stated herein.  These factors include worldwide
economic and political conditions, terrorist activities, industry specific
factors and governmental agencies.




Item 3. Quantitative and Qualitative Disclosures about
Market Risk





The
Company is obligated to purchase # 2 Heating Oil under various contracts with
its suppliers. As of September 30, 2007, total open commitments under these
contracts were approximately $5.2 million and expire on various dates through
the end of August 2008.





Exchange
Rate, Interest Rate and Supply Risks




The
Company has no exchange rate risks as we conduct 100% of our operations in the
United States of America, and we conduct our transactions in US
dollars.  The Company is exposed to extensive market risk in the areas
of fuel cost, availability and related financing and interest
cost.  Increases in our borrowing rates, as small as 100 basis points,
could significantly increase our losses and hinder our ability to purchase our
fuels for resale.  The slightest disruption in the fuel supply chain
could also significantly increase our losses and hinder our ability to purchase
our fuels for resale.  The Company has no protection against
interest rate risk or supply disruptions.  Other than the above noted
futures contracts, the Company does not engage in any other sort of hedging
activity and holds no investments securities at September 30, 2007.





31





Off-Balance
Sheet Arrangements





The
Company does not have any off-balance sheet financing arrangements.




Item
4. Controls and Procedures




Evaluation
of Disclosure Controls and Procedures





An
evaluation of the Company's disclosure controls and procedures (as defined in
Section13a-15(e) of the Securities Exchange Act of 1934 (the "Act")) was carried
out under the supervision and with the participation of the Company's Chief
Executive Officer and Acting Chief Financial Officer and several other members
of the Company's senior management at September 30, 2007. Based on this
evaluation, and as noted below, the Company's Chief Executive Officer and Acting
Chief Financial Officer concluded that as of  September 30, 2007, the
Company's disclosure controls and procedures were not effective, for the reasons
discussed below, at a reasonable level of assurance, in ensuring that the
information required to be disclosed by the Company in the Reports it files or
submits under the Act is (i) accumulated and communicated to the Company's
management (including the Chief Executive Officer and Acting Chief Financial
Officer) in a timely manner, and (ii) recorded, processed, summarized and
reported within the time periods specified in the SEC's rules and forms. The
Company identified a weakness during the preparation of the September 30, 2006
Form 10-Q. The weakness related to the Company’s loss of its then Chief
Financial Officer and the appointment of an Acting Chief Financial
Officer.  As a result of the SEC’s Formal Order of Private
Investigation and the subpoenas issued in connection therewith and the change of
the Company’s auditors, the Company became delinquent in filing its SEC
reports.  During the preparation of the September 30, 2006 Form 10-Q,
the Company retained independent consultants with experience in public company
disclosure requirements to assist the Chief Executive Officer and the acting
Chief Financial Officer in their respective duties during the review,
preparation and disclosures required in SEC rules and regulations.





Changes
in Disclosure Controls and Procedures





A new
Chief Financial Officer was appointed as of September 24, 2007 and the Company
continues to engage independent consultants with experience in public company
disclosure requirements to assist such officers in their respective duties
during the review, preparation and disclosures required in SEC rules and
regulations.   The Company believes that its appointment of its
new Chief Financial Officer, along with the continued retention of independent
consultants, will result in its disclosure controls and procedures being
sufficiently effective to insure that the Company will become compliant with its
SEC reporting requirements.









32


PART
II. OTHER INFORMATION





ITEM
1. LEGAL PROCEEDINGS





On June
26, 2007, the Company and its affiliate, Properties (together with the Company
the “Claimants”), filed a Demand for Arbitration and Statement of Claim in the
Denver, Colorado office of the American Arbitration Association against Manns
Haggerskjold of North America, Ltd. (“Manns”), Scott Smith and Shannon Coe
(collectively the “Respondents”), Arbitration Case No. 77 148 Y 00236 07 MAV.
The Statement of Claim filed seeks to recover fees of $1.2 million paid to Manns
to obtain financing for the Company and Properties. The Claimants commenced the
Arbitration proceeding based upon the Respondents breach of the September 14,
2006 Commitment Letter from Manns to Plazas that required Manns to loan Plazas
$150 million. The Statement of Claim sets forth claims for breach of contract,
fraud and misrepresentation and lender liability. On July 23, 2007, Respondents
filed their answer to the Statement of Claim substantially denying the
allegations asserted therein and interposing counterclaims setting forth claims
against the Company for breach of the Non-Circumvention Clause, breach of the
Exclusivity Clause and unpaid expenses. Respondents also assert counterclaims
for fraudulent misrepresentation and unjust enrichment. On Respondents’
counterclaim for breach of the Non-Circumvention Clause, Respondents claim
damages of $6,402,500. On their counterclaim for breach of the Exclusivity
Clause, Respondents claim damages of $3,693,750, plus an unspecified amount
related to fees on loans exceeding $2,000,000 closed by Properties or the
Company over the next five years. Respondents do not specify damages relative to
their other counterclaims.





On August
7, 2007, the Claimants filed their reply to counterclaims denying all of
Respondents material allegations therein. Respondents’ counterclaims were based
on the false statement that the Claimants had, in fact, received the financing
agreed to be provided by Manns from a third party.  The Respondents
subsequently withdrew all of their counterclaims.





The
parties have selected an Arbitrator and are presently engaged in
discovery.  The parties have exchanged documents and the depositions
of the parties have commenced and are scheduled to be concluded in November,
2008.  The hearing of the parties’ claims is scheduled to commence
before the Arbitrator on December 8, 2008.





SEC Formal Order of Private
Investigation





On August
31, 2007, the Company was served with a second subpoena duces tecum (the “Second
Subpoena”) from the SEC pursuant to the Formal Order of Investigation issued by
the SEC on September 7, 2006. The Company continues to gather, review and
produce documents to the SEC and is cooperating fully with the SEC in complying
with the Second Subpoena. As of the date of this Report, the Company has
produced and will, if required, continue to produce responsive documents and
intends to continue cooperating with the SEC in connection with the
investigation.  On May 13, 2008, the Company received correspondence
from the SEC requesting the Company respond, in writing, to eleven questions
proffered by the SEC staff.  The Company provided its responses to the
eleven questions to the SEC on May 21, 2008.  The responsive
correspondence was signed by the Company’s outside SEC counsel, Buchanan
Ingersoll & Rooney, PC, after it was reviewed by the Company’s senior
management, as well as the Company’s outside financial consultant and the
Company’s auditors.





On July
29 and 30, 2008, the Company’s CEO, Mr. Frost and the Company’s Executive
Vice-President, Business Development, Mr. Nocito, were deposed by the
SEC.  The Company has been advised by its SEC counsel, who also
attended the depositions that it believes the primary focus of the investigation
is for the Company to complete its outstanding, delinquent SEC filings in order
to obtain filing compliance.





ITEM 1A.
RISK FACTORS





There
were no material changes in risk factors from those previously disclosed in the
Company’s Annual Report on Form 10-K for the year ended June 30,
2007.





ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





None.





ITEM
3. DEFAULTS UPON SENIOR SECURITIES





None.





ITEM
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





None.




33


ITEM
5. OTHER INFORMATION





Consulting
Agreement





On August
27, 2007 the Company’s subsidiary, PriceEnergy.com, Inc., entered into a service
agreement with Axis Consulting Services, LLC. The agreement calls for Axis
Consulting to develop marketing plan (phase 1) and manage (phase 2) “The Energy
Store” (an e-commerce retail sales portal for energy products and services).
During phase 1, the terms are $2,750 per month and once phase 2 commences an
amount of $5,600 per month. This agreement ends on December 31,
2008.  Axis Consulting’s President (Joe Nocito) has a direct
relationship as the son of the Company’s Executive Vice-President Frank
Nocito.









34





ITEM
6. EXHIBITS




3.1
            Articles
      of Incorporation of Registrant (incorporated herein by reference to
      Exhibit 3.1 to the Company’s Registration Statement on Form SB-2, SEC File
      No. Number 333-51909, filed with the Securities and Exchange Commission
      (“SEC”) on July 15, 1998 (the “1998 Form
  SB-2”)).





3.2
            By-Laws
      of Registrant (incorporated herein by reference to Exhibit 3.2 to the 1998
      Form SB-2).





3.3
              Certificate
      of Amendment to the Certificate of Amendment of Registrant dated May 30,
      2007 (incorporated herein by reference to Exhibit 99.1 to the Company’s
      Current Report on Form 8-K dated May 24, 2007, filed with the SEC on May
      30, 2007).





4.1
            Specimen
      Common Stock Certificate (incorporated herein by reference to Exhibit 4.21
      to Amendment No. 3 to the Company’s Registration Statement on Form SB-2,
      SEC File No. Number 333-51909, filed with the SEC on May 17, 1999 (the
      “Amendment No. 3 to the 1998 Form
SB-2”)).





4.2
            Able
      Energy, Inc. 2000 Employee Stock Purchase Plan (incorporated herein by
      reference to the Company’s Definitive Proxy Statement on Schedule 14A
      filed with the SEC on May 30,
2000).





4.3
            Able
      Energy, Inc. 2005 Incentive Stock Plan (incorporated herein by reference
      to Exhibit 4.1 to the Company’s Current Report on Form 8-K. dated May 25,
      2005, filed with the SEC on June 1, 2005 (the “May 2005 Form
      8-K”)).





4.4
            Form
      of Incentive Stock Option Agreement (incorporated herein by reference to
      Exhibit 10.1 to the May 2005 Form
8-K).





4.5
            Form
      of Employee Nonstatutory Stock Option Agreement (incorporated herein by
      reference to Exhibit 10.2 to the May 2005 Form
  8-K).





4.6
            Form
      of Nonstatutory Stock Option Agreement (incorporated herein by reference
      to Exhibit 10.3 to the May 2005 Form
8-K).





4.7
            Form
      of Consultant Nonstatutory Stock Option Agreement (incorporated herein by
      reference to Exhibit 10.4 to the May 2005 Form
  8-K).





4.8
            Form
      of Stock Award Agreement (incorporated herein by reference to Exhibit 10.5
      to the May 2005 Form 8-K).





4.9
            Form
      of Restricted Stock Purchase Agreement (incorporated herein by reference
      to Exhibit 10.6 to the May 2005 Form
8-K).





4.10
            Form
      of Secured Debenture, made as of June 1, 2005, by All American Plazas,
      Inc., Yosemite Development Corp. and Mountainside Development, LLC in
      favor of the Purchasers named therein (incorporated herein by reference to
      Exhibit 99.2 to the Company’s Current Report on Form 8-K, dated June 7,
      2005, filed with the SEC on June 10, 2005 (the “June 2005 Form
      8-K”)).





4.11
            Additional
      Investment Right (incorporated herein by reference to Exhibit 99.3 to the
      June 2005 Form 8-K).





4.12
            Form
      of Registration Rights Agreement by and among the Purchasers named therein
      and the Company (incorporated herein by reference to Exhibit 99.5 to the
      June 2005 Form 8-K).





4.13
            Form
      of Common Stock Purchase Warrant Agreement (incorporated herein by
      reference to Exhibit 99.6 to the June 2005 Form
  8-K).





4.14
            Form
      of Variable Rate Secured Convertible Debenture made by the Company in
      favor of the holder thereof (incorporated herein by reference to Exhibit
      99.7 to the June 2005 Form 8-K).





4.15
            Warrant
      Agreement between the Company and Continental Stock Transfer & Trust
      Company (incorporated herein by reference to Exhibit 4.2 to the 1998 Form
      SB-2).





4.16
            Able
      Energy, Inc. 2000 Employee Stock Bonus Plan (incorporated herein by
      reference to the Company’s Definitive Proxy Statement on Schedule 14A
      filed with the SEC on May 30,
2000).





4.17
            Form
      of Variable Rate Convertible Debenture, dated July 12, 2005, made by the
      Company in favor of the holder thereof (incorporated herein by reference
      to Exhibit 99.2 to the Company’s Current Report on Form 8-K, dated July
      14, 2005, filed with the SEC on July 15, 2005 (the “July 2005 Form
      8-K”)).




35




4.18
            Form
      of Registration Rights Agreement, dated as of July 12, 2005, by and among
      the Company and the purchaser’s signatory thereto (incorporated herein by
      reference to Exhibit 99.3 to the July 2005 Form
  8-K).





4.19
            Form
      of Common Stock Purchase Warrant Agreement (incorporated herein by
      reference to Exhibit 99.4 to the July 2005 Form
  8-K).





4.20
            Promissory
      Note dated July 21, 2005 made by All American Plazas, Inc.
      in  favor of the Company (incorporated herein by reference to
      Exhibit 10.5 to the Company’s quarterly report on Form 10-Q for the
      quarter ended September 30, 2005 (the “2005 First Quarter Form
      10-Q”).





4.21
            Subscription
      Agreement, dated as of September 30, 2005, between the Company and the
      holder of a promissory note, dated February 22, 2005, issued to the
      Subscriber by the Company (incorporated herein by reference to Exhibit
      10.7 to the 2005 First Quarter Form
10-Q).





4.22
            Form
      of Secured Debenture, dated January 20, 2006, made by All American in
      favor of the Purchasers (incorporated herein by reference to Exhibit 99.2
      to the Company’s Current Report on Form 8-K, dated January 20, 2006, filed
      with the SEC on January 23, 2006 (the “January 2006 Form
      8-K”)).





4.23
            Form
      of Additional Investment Right (incorporated herein by reference to
      Exhibit 99.3 to the January 2006 Form
8-K).





4.24
            Promissory
      Note, dated July 6, 2006, made by All American Plazas, Inc. in favor of
      the Company (incorporated herein by reference to Exhibit 10.9 to the
      Current Report on Form 8-K, dated June 30, 2006, filed with the SEC on
      July 7, 2006 (the “June 2006 Form
8-K”)).





4.25
            Common
      Stock Purchase Warrant, dated June 30, 2006, issued by Able Energy, Inc.
      to Laurus Master Fund, Ltd. (incorporated herein by reference to Exhibit
      10.3 to the June 2006 Form 8-K).





4.26
            Convertible
      Term Note, dated June 30, 2006, made by Able Energy, Inc. in favor of
      Laurus Master Fund, Ltd. (incorporated herein by reference to Exhibit 10.2
      to the June 2006 Form 8-K).





4.27
            Registration
      Rights Agreement, dated June 30, 2006, between Able Energy, Inc. and
      Laurus Master Fund, Ltd. (incorporated herein by reference to Exhibit 10.4
      to the June 2006 Form 8-K).





4.28
            Form
      of Variable Rate Secured Debenture (incorporated herein by reference to
      Exhibit 4.1 to the Current Report on Form 8-K, dated August 8, 2006, filed
      with the SEC on August 14, 2006 (the “August 2006 Form
    8-K”)).





4.29
            Registration
      Rights Agreement, dated as of August 8, 2006, by and among the Company and
      the Purchasers named therein (incorporated herein by reference to Exhibit
      4.2 to the August 2006 Form 8-K).





4.30
            Form
      of Common Stock Purchase Warrant (incorporated herein by reference to
      Exhibit 4.3 to the August 2006 Form
8-K).





10.1
            Lease
      of Company's Facility at 344 Route 46, Rockaway, New Jersey (incorporated
      herein by reference to Exhibit 10.3 to the 1998 Form
  SB-2).





10.2
              Franchise
      Agreement, dated December 31, 1998, between the Company and Andrew Schmidt
      (incorporated herein by reference to Exhibit 10.19 to Amendment No. 2 to
      the 1998 Form SB-2).





10.3
            Stock
      Purchase Agreement, dated as of December 31, 1998, between the Company and
      Andrew Schmidt (incorporated herein by reference to Exhibit 10.20 to
      Amendment No. 2 to the 1998 Form
SB-2).





10.4
            Pledge
      and Security Agreement, dated December 31, 1998, between the Company and
      Andrew Schmidt (incorporated herein by reference to Exhibit 10.21 to
      Amendment No. 2 to the 1998 Form
SB-2).





10.5
            9.5%
      Promissory Note, dated December 31, 1998, made by Andrew Schmidt in favor
      of the Company (incorporated herein by reference to Exhibit 10.22 to
      Amendment No. 2 to the 1998 Form
SB-2).





10.6
            Loan
      and Security Agreement, dated as of May 13, 2005, between the Company,
      Able Oil Company, Able Energy New York, Inc. Able Oil Melbourne, Inc.,
      Able Energy Terminal, LLC and Able Propane, LLC (as borrowers) and
      Entrepreneur Growth Capital, LLC (incorporated herein by reference to
      Exhibit 10.26 to the Company’s Annual Report on Form 10-K for the year
      ended June 30, 2005 (the “2005 Form
10-K”)).




36




10.7
            Promissory
      Note, dated May 13, 2005, made by the Company in favor of Northfield
      Savings Bank, (incorporated herein by reference to Exhibit 10.27 to the
      2005 Form 10-K).





10.8
            Securities
      Purchase Agreement, by and among All American Plazas, Inc., dated as of
      June 1, 2005 (incorporated herein by reference to Exhibit 99.1 to the June
      2005 Form 8-K).





10.9
            Form
      of Securities Assumption, Amendment and Issuance Agreement by and among
      the Purchasers named therein and the Company (incorporated herein by
      reference to Exhibit 99.4 to the June 2005 Form
  8-K).





10.10
              Stock
      Purchase Agreement, by and between the Sellers named therein and the
      Company, dated as of June 16, 2005 (incorporated herein by reference to
      Exhibit 10.1 to the Company’s Current Report on Form 8-K, dated June 16,
      2005, filed with the SEC on June 16,
2005).





10.11
            1999
      Employee Stock Option Plan (incorporated herein by reference to Exhibit
      10.2 to Amendment No. 2 to the 1998 Form
  SB-2).





10.12
            Asset
      Purchase Agreement, dated March 1, 2004, by and among the Company, Able
      Propane Co., LLC, Christopher Westad, and Timothy Harrington, Liberty
      Propane, L.P. and Action Gas Propane Operations, LLC (incorporated herein
      by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K,
      dated March 16, 2004, filed with the SEC on March 16,
    2004).





10.13
            Asset
      Purchase Agreement between the Company and All American Plazas, Inc dated
      as of June 16, 2005 ( incorporated by reference to Annex A to the
      Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on
      July 28, 2006).





10.14
              Securities
      Purchase Agreement, dated as of July 12, 2005, among the Company and the
      purchaser’s signatory thereto (incorporated herein by reference to Exhibit
      99.1 to the July 2005 Form
8-K).





10.15
            Employment
      Agreement, dated as of October 13, 2005, between the Company and Gregory
      D. Frost (incorporated herein by reference to Exhibit 99.1 to the
      Company’s Current Report on Form 8-K, dated October 13, 2005, filed with
      the SEC on October 19, 2005).





10.16
            Amendment
      Agreement, dated as of November 16, 2005, by and among the Company and the
      holders signatory thereto (incorporated herein by reference to Exhibit
      99.1 to the Company’s Current Report on Form 8-K, dated November 14, 2005,
      filed with the SEC on November 18,
2005).





10.17
            Securities
      Purchase Agreement, by and among All American and the Purchasers, dated as
      of January 20, 2005 (incorporated herein by reference to Exhibit 99.1 to
      the January 2006 Form 8-K).





10.18
            Form
      of Security Agreement, dated as of January 20, 2006, by and between St.
      John's Realty Corporation and Lilac Ventures Master Fund, Ltd., as agent
      for the Secured Parties listed therein (incorporated herein by reference
      to Exhibit 99.4 to the January 2006 Form
8-K).





10.19
            Loan
      Agreement, dated as of January 20, 2006, by and between All American
      Plazas, Inc., St. John's Realty Corporation, Lilac Master Ventures Fund,
      Ltd. and the Purchasers listed there (incorporated herein by reference to
      Exhibit 99.5 to the January 2006 Form
8-K).





10.20
            Securities
      Purchase Agreement between Able Energy, Inc. and Laurus Master Fund, Ltd.
      dated June 30, 2006 (incorporated herein by reference to Exhibit 10.1 to
      the June 2006 Form 8-K).





10.21
            Subsidiary
      Guaranty dated June 30, 2006 of Able Oil Co., Able Propane Co, LLC, Able
      Energy New York, Inc., Abel Oil Melbourne, Inc., Able Energy Terminal,
      Inc., Priceenergy.com, Inc. and Priceenergy.com and Franchising, LLC
      (incorporated herein by reference to Exhibit 10.5 to the June 2006 Form
      8-K).





10.22
            Loan
      Agreement, dated July 5, 2006, by and between the Company and All American
      Plazas, Inc. (incorporated herein by reference to Exhibit 10.8 to the June
      2006 Form 8-K).





10.23
            Securities
      Purchase Agreement, dated as of August 8, 2006, by and among the Company
      and the Purchasers (incorporated herein by reference to Exhibit 10.1 to
      the August 2006 Form 8-K).





10.24
            Security
      Agreement, dated as of August 8, 2006, by and among the Company, the
      Company's subsidiaries and the Purchasers (incorporated herein by
      reference to Exhibit 10.2 to the August 2006 Form
  8-K).




37




10.25
              Account
      Purchase Agreement between All American Plazas, Inc. and Crown Financial,
      LLC dated January 8, 2007*





10.26
              Account
      Purchase Agreement Modification between All American Plazas, Inc. and
      Crown Financial, LLC, dated June 29, 2007 effective July 1,
      2007.*





10.27
            Credit
      Card Receivables Purchase Agreement between All American Plazas, Inc. and
      Credit Cash, LLC dated July 16,
2007.*





10.28
            Consulting
      Agreement between PriceEnergy.com, Inc. and Axis Consulting Services dated
      August 27, 2007.*





31.1
            Certification
      by Chief Executive Officer pursuant to Sarbanes-Oxley Section
      302*





31.2
            Certification
      by Chief Financial Officer pursuant to Sarbanes-Oxley Section
      302*





32.1
            Certification
      by Chief Executive Officer pursuant to 18 U.S. C. Section
      1350*





32.2
            Certification
      by Chief Financial Officer pursuant to 18 U.S. C. Section
      1350*





* Filed
herewith

















38





SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.





Able
Energy, Inc.




By:
              /s/ Gregory
    FrostGregory FrostChief Executive
      Officer




By:
                /s/ Daniel L. JohnstonDaniel L. JohnstonChief Financial
      Officer




November
13, 2008








39